... Several years ago I had a drive that would disappear from the list every so often- and almost give me a heart attack. We never lost any data, but we did have issues with the drive letters like you mentioned...
Anyone seeing this happen frequently should be advised that this is a possible indicator of a failing hard drive.
I did notice, however....that the EHD drive was E: so that is where Picasa scans. Now, it shows F: and my CD/DVD drive is E:. ??? What???? How can that just randomly change?? And why oh why would it do that???
This is not uncommon. As you plug in an external hard drive, a memory stick, your phone or camera, etc., Windows reassigns the drive letters to the next available drive letter. As soon as you remove your media, the drive letter can be assigned to a different media. So if you plug in your external hard drive and it shows, for example "F", then you just need to tell Picassa to look in drive F.
I have read that there is software that you can get that will manage drive letters. I take it to mean that it can recognize a particular media (such as a Western Digital 1TB external hard drive) and permanently assign it the drive letter of your choice.