
Well figured this out as well.
I kept thinking I was having a problem with backing up my local drive but never gave a thought that maybe something was wrong with the destination drive.
Trying to remember when the last time I have a successful backup of this second physical drive was just before I updated the firmware to 2.05
After that it stopping working and I was doing a manual copy from the drive to the DNS-320
ON a grabbing of straws I decided to rename the destination location direction to (Old-S) and create a new directory S and pointed to that one.
WOW now backing up as normal.
Sorry Microsoft this one was not on you