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1) When you buy two identical drives from the same place they often come from the exact same production batch.
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There could be something wrong with the NAS ...
I did indeed suspect a NAS issue. The first two sets of drives I used ended up with all four drives bad so it was hard not to consider this as a possible problem.
While waiting for replacement drives I took two older unused 250 GB drives and tested them using Western Digital Lifeguard extended tests. Both drives tested sat. I then installed them in the DS212 without any problems.
Over the past two days I received both replacement hard drives from Newegg. After both drives tested sat using WD Lifeguard extended tests I installed them in the DS212 without any problems. The DS212 is now up and running with no obvious problem.
This is my theory for explaining four failed drives.
The first two drives I installed in the DS212 were two year old 1 TB WD blue drives that were previously installed in a DLink DNS323 NAS. Although they worked apparently without a problem in the DNS323 they did not work in the DS212 and subsequent testing indicated many bad sectors. The transfer rates associated with the DLink DNS323 are very slow so file/folder transfers of any consequential size could take hours. The DNS323 also has a pathetic tiny token exhaust fan on the back that does not move much air so the drives always ran very warm (hot?). I think it is possible both blue drives were already damaged from their service in the DNS323. The bad sectors, not noticed by the DNS323, immediately became apparent in the DS212 when the parity test commenced.
The two black drives, wrapped in bubble wrap, instead of being supported by the intended plastic molded shipping supports, were probably both damaged during shipment. Interestingly, the new replacement black drives Newegg sent me have the same production date so I think it is reasonable to assume they are from the same manufacturing run.