I have a Terastation TS-XE2.0TL/R5. I constantly lose connection to it. I am running Firmware version 1.5 only because I cannot update the Firmware due to connection. When I start updating it, it loses connection and can not update. The unit has a static IP. When you power the unit on I can access the folders on it. But after a few minutes I can no longer connect to them. I have tried plugging it in to different switches and still have the same problem.
Test it on a direct ethernet connection to a PC with an Cat5e cable and see if the same thing is occuring. You will need to have a static IP set on the NIC of the PC also.