Q1 - How have you determined that the hard drive is not being recognized?
Q2 - How have you determined that the hard drive has not failed?
In the early days of my DNS-323 I was very curious as to how certain aspects of it worked, and before putting it to use as a storage device, I spent many days testing & experimenting - and some of those tests included putting known defective drives in to see how the unit would respond - a continuously flashing blue drive light was one of the symptoms observed.
Assuming that the status page only shows one drive, you can remove the "failed" drive and power up the NAS so that it sees the drive missing. Install the drive in a computer and, if it is in fact functional, remove all the partitions & reinstall it, and then power the NAS up again. This will force the NAS to treat the drive as failed, and then as a "new" replacement.
If you don't already have a backup - make one before you start.