bigdave240, I initially got the same trouble with the USB backup feature.
I almost lost the fearless beta tester will to go on...but just now, after much experimenting, usb backup is now running.
Unfortunately, the Firmware v1.04b05 changes appear to be made to the existing "USB Copy Function" that is explained on p. 109 of the version 1.0 DNS-325 owner's manual.
And this feature requires one to press the "USB copy / unmount" button on the back of the DNS-325 for 1 to 3 seconds, in order to activate the USB backup feature.
If one presses the "USB copy / unmount" button for more than 5 seconds, the USB device is unmounted.
How disappointing. Would it not be more helpful to allow a scheduled USB backup that did not require pushing a button for 1 to 3 seconds?
Well, here is how it goes to get it working...
One must have the USB drive connected in order to set up the Applications / Local Backups / USB Backups feature. Otherwise, one only sees the helpful "None USB Storage." message.
I used a 698 GB NTFS disk in an ORICO USB drive enclosure. The same disk with exFat formatting did not work.
In Applications / Local Backups / USB Backups, I entered the following settings:
USB Backups --> "Enable" (Radio Button)
Category --> "NAS to USB" (Radio Button)
Source --> "Volume_1" (one can use the browse button to select the NAS volume)
Destination --> "USBDisk1_1/USBBackup" (I made a "USBBackup" folder on the USB disk to hold the backups and used the browse button to select this destination folder)
Type --> "Copy" (Drop Down)
Status --> Status will show "---" before the process starts. It will show "Backup fail (Error Code:2)." if the destination folder does not exist. It will show "" or nothing, while the copy process is running (contrary to the description found next to "Copying Status" in the right-hand help pane).
Be sure to press the "Save Settings" button.
Now, press and hold the "USB copy / unmount" button on the back of the DNS-325 for 1 to 3 seconds.
When the USB copy feature is activated, it will create a YYYY-MM-DD-HH-MM-SS folder in the destination folder.
The backup files and folders will be placed inside the YYYY-MM-DD-HH-SS folder.
HTH
wylajb