I had a similar issue. I have a 1TB Seagate mini Firewire 800 drive that I use as a Time Machine backup on my Mac mini at work. The backup had been encrypted, but one day upon rebooting my mini (the building somehow lost power one night), the drive wouldn't accept the password require to decrypt and mount the volume.
Fortunately it was just a Time Machine backup and I could erase it and start fresh. Unfortunately, there was nothing I could do to get Disk Utility to erase or repartition the drive. It kept failing due to inability to either mount or unmount. It's possible the drive was damaged physically when the power cut out, but I wasn't convinced.
I put the drive on a Windows PC, reformatted it to NTFS, verified it's SMART status, took it back to the Mac and reformatted to GUID/jHFS. All seems to be working correctly again. This time, I chose not to encrypt the backup (even though the mini itself has File Vault turned on).