I don't know whether you resolved the question and/or you are still after it. By the way you are lucky, 500Gb HD sounds great for fedora 16. I got it working Ok on a 32Gb usb pen driver. I didn't have that problem you report. (My problem were others, lol. e.g. make partitions in the pendriver and use only part of it, etc). So, going to the point:
1.First thing I did: using a partition manager convert the whole HD to ext4 filesystem.
2. Then, following carefully (e.g) this screenshoot guide
. Read it before anything as your choice to each option could be different. For instance:
3.In 2.9 I opted for: "Use all the space" (I tryed with those other options, but unsuccessfully)
4.Here Carefullly. Select the HD target (your iomega 500gb).
5. Then, as shown in 2.12 select the "Change device" and select the HD (your Iomega 500Gb) where will go the boatloader.
And that's it!. Then I updated fedora, some post-install adds as shown here: http://www.my-guides.net/en/guides/l...allation-guide
And that's it.
Hope you find this of help.