Basil, this sounds promising.
1. What sort of USB hard drive have you?
2. Is there only music stored?
3. What format?
Western Digital, one of these:
http://www.ebuyer.com/174844-western-digital-elements-1tb-external-hard-drive-hi-speed-usb-retail-wdbaau0010hbk-uesn
Yes.
Mostly Wav., not for any sound reason, I'm just very lazy and can't be bothered to use flac until I need to...
Some flac & MP3 free downloads, squeezebox plays everything, including Apple lossless and flac 24/96 samples from Chandos.