Hi Detrius and others,
I just solved a similar issue involving my White Macbook, Time Capsule, and external 1TB Buffalo Hard Disk!
Background:
I used to have a fully working connection between my Macbook and Buffalo HD (connected to Time Capsule over USB cable to be shared wirelessly).
Problem:
A few days ago I started getting error dialog "Original item for 'Buffalo HD' cannot be found..." The error dialog gives 3 buttons, but none of them actually works.
Solution:
1. Download "Path Finder" application (comes with 30-day free trial) from:
http://www.cocoatech.com/
2. Install the application normally (by dragging the application icon to your Application directory).
3. Start Path Finder, right-click the problematic USB drive's icon, and select "Get Info".
4. You'll see a lot of information, including checkboxes like "Locked" and further down "Alias bit".
5. Just uncheck the "Alias bit" checkbox, and Voila! Your USB drive works again in the OSX Finder.
Hopefully this helps!