I had a problem like this recently. I finally had to give up on the drive and use a different one (which worked like all the others I had done).
I took a previously used WD60GB drive and Winhex'd my stock Xbox drive to it. I then ran liveinfo with the new 60GB drive connected as prim slave (I even tried moving it around and disabled the drive in the bios, etc) and loaded my eeprom file and selected the new drive. I wrote down the key (and even copied it to the clipboard and pasted it into wordpad and printed it out after the second attempt, just to make sure I wasn't reading any characters wrong). I locked the drive successfully (unlockx) and made sure it was locked. I got error 06 on the Xbox. First time I ever saw that. I went back and did it all over again. I used several different versions of Evox (using it's backup function to capture the eeprom) and all resulted in the exact same password being generated. I tried liveinfo v2 & 3 with the same result. Finally (after 4 attempts) I grabbed a new WD40GB drive off the shelf and redid the process. Bam, worked like a charm. I then tried one last time by Winhexing the new 40GB to the 60GB drive..no joy. Very odd. What is even stranger is I believe that 60GB drive was one that I used last year on a different Xbox with success. I then upgraded that Xbox to a 120GB, so I just kept it as a spare drive.
Everything I have read tells me that I must have written down the wrong password that liveinfo generated (I know I didn't - even printed it out), my backup of my eeprom must have been incorrectly generated by Evox (if so, how did that same eeprom file work on the 40GB?).
I don't really need to get the drive working with that box (was for a friend who just wants to play emulators...40GB is fine), but I hate not knowing what the problem is with using that drive. Any ideas?