Well folks, guess what, you can easily replace the XS32 HDD with the same model drive! It's as close to plug and play as you can expect.
I made sure the HDD jumper was on Master, unplugged the XS32, etc. When I powered up the unit (holding my breath and with my fingers crossed) there were no display error codes! Simply one message on the screen that the HDD could not be authenticated, contact a service center. I hit Enter, went to Setup--HDD Format, and it works perfectly!! I put the original HDD back in and all content was there. Put the new HDD back in, still okay.
I feel stupid for not having tried the same model drive long ago, but I just couldn't find one at a good price. I got this one for $32 here: http://www.santechusa.com/advert.asp?id=8314
It was supposed to be refurbished, but it looks brand new to me and has none of the usual manufacturer refurbed stickers.
I don't know if any other 80GB drive will work in the XS32, but at least it now looks like the HDD in every XS model can be replaced with a similar one. I have to give Toshiba a lot of credit for making the firmware easily recognize and format new HDDs. One of these days I'll format the 80GB HDD in my pc and see if the XS32 can reformat it okay.