I had a 500GB drive I was using for my operating system. I had it fail on me again and again and again. I would guess that the drive is toast. I now have my RMA and will be shipping the drive on the 1st of July, 2013. I have been a lover of WD harddrives for a long time.
WD drives are good and they have a great Warranty service. Good thing you are going to have it replaced. But for future reference you can always use the WD DLG tool to test the unit for defects. I have posted a link below when you can see more information.