I would back all the stuff up as soon as possible (no problem to re-open and reconnect all your stuff), then instead of formatting directly, I would run the Disk utility and Diskwarrior to see if can be fixed without formatting.
HDs are like that. Few days ago I've lost two WesternDigital with just few weeks of use. I'll never buy again that brand.
rafael
http://www.nagavideo.com