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Seems to be recurring problem due to other people reporting the same issue.
All works fine until one day the blue light comes on but the drive inside does not spin up.
I have just disassembled and the drive is a western digital caviar 320gb. Put it in a different enclosure and the data and drive are fine.
I suspect the little pcb inside. Probably not supplying 12V properly so the drive could not spin up. could not see any signs of an internal fuse. Linux also did not report anything when plugged in, so no comms over USB to the host system. Very Borked.
Good drive inside though. You might be able to find them cheap just for the drive with prices being high for storage at the moment ( as of end of 2011)