Oblivion Shivering Isle?

so im attempting to install the expansion for oblivion elder scrolls, however when i insert the dic im propted that i need to attach a hard drive. i have an external HDD attached that has 16 gb dedicated to xbox memory (12gb free). iv saved games and game data to vthis before so i cant understand why this game wont work. any help would be appreciated. (and i know the obvious answer is to sack up and buy an official microsoft hdd but im on a tight college budget).