I don't think that's the issue - it doesn't recognize the 3TB drive either a boot, or if I plug it in once win xp has booted. The usb flash drive works fine in either usb 2.0 or usb 3.0 ports.
I am starting to think that it might be a size limitation. Drives above 2TB aren't natively supported on winxp - there needs to be a 512e mode that the drive supports apparently. I will try a brand new 2TB drive and report back.