I think you are actually referring to a normal external USB HDD, not a microsoft one. Why would you plug an official one in using USB? Do you have USB>SATA converter?
When you first plugged it in chances are that it was formatted with 250GB FAT32 by a PC for normal external media storage.
You then picked configure for use with xbox option in the new dash, which formatted the drive with a 16GB partition for full 360 usage (like profiles and game saves). This is why the memory is missing.
You need to format the USB drive again in a PC as FAT32 format if you want the xbox to see the full 250gb but the retail 360 dash can only use it for media.
Also note that windows XP and Vista cant format 250gb as FAT32 due to the way it mounts drives, you need to download an app like this: http://tokiwa.qee.jp/EN/Fat32Formatter/