Ran into this issue when adding a second drive to DNS-321 and was able to clear it without changing firmware (I'm using ver 1.03).
Existing drive is Seagate 1 TB in left bay facing the unit front (Samba as Volume_1). Adding new WD Caviar Green 1.5 TB to right bay. Seagate is to be the "data" drive, and Caviar will be the "backup" to be removed and stored off site. I do not want to RAID; just wanted additional storage to appear as another share volume. Unwrapped the Caviar and put it in, got this 112 error many times despite reboot.
Scanned Caviar using WD Lifeguard diagnostic s/w and drive was fine (of course). Then got the idea to power down NAS, eject Seagate from left bay. Insert Caviar in right bay, power on. Logged into web interface, and got options to format to ext2, ext3. Selected the default ext2 format, and formatting took about 25 minutes and completed successfully. Now the Caviar was assigned Volume_1.
Powered down, inserted original Seagate to left bay, powered up. Two drives were now available, no data lost on the Seagate. So that bypasses the original error of this thread.
But Seagate was Volume_2. All my shares are setup for that drive to be Volume_1. Swapped bays, and Seagate was still Volume_2. Couldn't figure out how to be certain the Seagate would always be Volume_1, but found workaround.
Used this: http://blog.focusedonlight.com/archive/2009/january/howtorenamevolume
Created new folder "Data" in the Seagate root. Moved all files on Seagate into "Data" folder. Added the "Data" folder as a Samba share. Then on Caviar, created new folder "Backup" and added it as a Samba share. Deleted "Volume_1" and "Volume_2" samba shares in the "Network Access" menu. (no worries, easy to add back on this same menu. No data loss since this is just the Samba share config)
I'm mapping to "Data" share now on all machines, so doesn't matter which drives gets Volume_1 or Volume_2 label. "Backup" share disappears from the list when Caviar is not present. But when Caviar is reinserted and NAS rebooted, "Backup" share reappears. Perfect!
Reminder: can't hot swap...
Some folks hate replies to "stale threads" and this thread may be stale. But this thread was the first hit in Google, so I figure this is the best place to post my findings in order to benefit others.