Even though the error messages you are seeing have changed it's still likely that you have the known problem with the IDE cable.
It sounds like you've done the right thing in terms of swapping over to the other IDE header in an attempt to get around the problem. As was suggested earlier, you need to replace your IDE cable (mail support at
[email protected] , they will send you one for free AFAIK). Since you only have one HDD you could turn the cable around 180 degrees so to speak in case it's bad at the motherboard end and not at the HDD end.
Otherwise, you might have dry joint(s) on the empeg mainboard's IDE header, the best solution is to send the unit in for service if this proves correct. It looks like you've already read this but
here's the FAQ entry describing the whole scenario.
The XP/USB thing is a
known problem - it's unrelated to your IDE problem, some people connect to the empeg through ethernet as a workaround.