I hate to tell you but I believe it is worse than you thought. You said that "the request could not be performed because of an I/O device error. " To me this is telling me that chances are your harddrive is either ready to die, or is dead. I think you need to invest in a new harddrive.
But the upside is that the data may still be recoverable, but if it is, you need to be ready to grab it all at once. This is the same thing that happened to me, and prompted me to buy the adapter I recommended to you. I was able to let the harddrive sit with the cables connected to it, for a couple hours, to make sure it was cold and stable. Then I plugged it in to the outlet, and then once it was spinning, to the computer. 1 time I was able to get it to access the harddrive, and once I did, I just copied everything. I ran into a few errors and I just skipped them instead of trying to recover the data. Which was a good thing, because shortly after I finished getting the data off, it became a brick.
You can try a format, but I don't think that you will ever have a stable system again. With the whole evolution of the problems that we have been trying to work thru, either you have electronic parts that are degrading for whatever reason, or there is a problem with the platters inside the harddrive.
Do you have a computer geek in the area? They may be able to pull the data off the drive for you, If the above procedure doesn't work.
I don't know what else to say.