1/3 of 12 gigs sounds about right: The backup file has a size limit of 4 gigs. That's essentially a bug. There is currently no work-around.
If you want to back up your MP3's, don't use the "backup" feature on displayserver. Just save them off one at a time, or use a WebWhacker-type product to do the whole thing at once. Let us know how it goes.
And I hope that metallic clicking doesn't get worse. That's the sound my hard disk made when it failed, and I only got about 5 minutes worth of warning between the time I noticed the problem and the time the hard disk failed completely.
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Tony Fabris