This appears to be a serious failure. I had a HDD fail once in this manner. I believe it was the read sector that went bad. I even sent it out to a professional recovery service with a $1,000 authorization and there was nothing they could do to recover my data. I'm sorry, but I am out of ideas, short of contacting a recovery service - There is one suggestion I will mention - I have never tried this program, but it appears to be an alternative: SpinRite
www.grc.com
There's a video of the program, customer reviews, etc. It provides low-level access to mass storage devices in a computer. I've never used it, but you may want to consider looking in to it. It's around $90 - which is cheaper than going to a recovery service, but there's no guarantee you will be successful. Like I said, I've never used the program, so I won't be able to help you through it, but I'm sure Gibson Research will assist you.
Please read the FAQs to get a feel for it:
http://www.grc.com/sr/faq.htm
Yes, okay, I probably would have done the same. [Fortunately I keep a 2nd backup set off-site...]
No, we don't want to write zeros to it just yet! I just mentioned that because some of these manufacturers' software will do that immediately and I wanted you to be aware of the danger.
I'm just wondering ... if you put the WD HDD back inside your computer ... if SpinRite will discover it in the FreeDOS environment and recover the data? Perhaps you might contact Gibson Research and ask their opinion/experience.
Really sorry I can't be of more help. I sympathize with you - I lost an entire first year's pics of my firstborn to a failed HDD. Really learned my lesson...