If the drive is password protected, it will still respond to an ATA Identify Device command. That's how BIOS and disc utllities, such as HDDSCan and HD Sentinel, determine the drive's capabilities and settings. However, a surface scan will fail on every sector.
When I suggested that you attempt to read sector 0 using a disc editor, I was endeavouring to determine whether the very first sector in the user area of the drive was accessible. SmartWare is installed in a hidden area. The fact that you can still access SmartWare would suggest that the drive can still be read, and that the USB interface is working perfectly.
I suggest you launch HxD, select Extras -> Open disk, highlight the Physical disk, tick the Open as Readonly box, and click OK. This should bring up the contents of sector 0, ie the MBR and partition table.