Where does PE "think" the files are located? That will be the key to getting this process started.
Next, in Disk Manager (located in slightly different places, depending on the exact OS), with your USB external plugged in, see if you can change its assigned drive letter to match. If it's C:\, obviously this will not work. And you need to move to phase two. Assign a permanent drive letter to this external. When I first started using a lot of externals to edit to/from, I went with Z:\ and worked backward. Each new external is a letter up the alphabet. I do this in the OS for all of my computers, so Z:\ appears as Z:\ on all systems.
Now, you will need to let PE ask you for the files, and then point it to the exact location. PE is smart enough to find all Assets linked in that folder. If you have several folders/sub-folders, then you'll need to do this for each folder/sub-folder. Once linked, do a Save_As with an incremented Project name.
You also indicated that you had done this, but the error of "Format is not correct, etc." appeared. This could be an issue with Windows Indexing system. I turn it OFF for all drives and all folders in all drives. Besides sapping resources, this program can lock files, or can send false messages to a program trying to access those files. Video files are big, and when editing, they get changed frequently. Windows Indexing wants complete control of these files, while it does its survey and will re-survey every time that the file changes. Get rid of it instantly. Searchs will be slower, but that's better than not being able to edit.
I've also see some problems with externals that have any drivers installed. You system should work fine without any of these. Things like Mastor's MasLoader can really get in the way. Also, if you are storing files and not using backup software, you want these drives to be out of any schedule, or scheme for backup. These get in the way.
If you cannot get PE to re-link to these files on the external, then something might be wrong with it. Try Copying just the ones that you need for your Project back where you took them from. Then research what might be up with your external.
I want to send my sincere and extreme thanks, i followed your direction and was able to reassign the address of my external to match the address that the software was looking for. I am now able to direct premier to the proper location when it asks "where is file..." , the only problem now , the movies i previously created, dont seem to recognize where the clips are located so in the timeline each clip still reads offline. Im about to investigate that now. Once again thank you.
Glad that most is working for you. You might have to re-link manually, for some of the other Projects. When doing this, I always do a Save_As and assign an incremented file name, say [Filename]_01 to it. Then I do the re-linking. This keeps the original intact, and you are now working with your Save_As file, in case you ever need to go back.
Usually, PE is pretty smart at helping one locate Assets and will do much of the re-linking automatically, once it's been pointed to the proper location. Sometimes, it does get fooled, and that is where the manual re-linking is required. I use a program, Directory Print (probably many more and newer versions available now) to print out a hard copy of my folder structure. This helps me help PE as much as possible. I also try to establish a folder hierarchy before I begin my Projects, so I have all Audio, all Video, all Stills, etc. in their proper sub-folders. I also work from copies of all of my Asset files, so no matter what happens, the originals are exactly where they were originally stored - only copies are in my Project's folder hierarchy.
Good luck, and let us know how the rest goes,