Just to add my twopenneth, I seem to have exactly the same problem. I have:
Powerbook G4, OS X 10.4.10, Attached via USB2 to Western Digital MyBook Essential 500GB. This exhibited the Error -36 problem straight out of the box. (I have 3 of these, bought at the samer time. They all do exactly the same thing - brand new, out the box).
Same PB G4, Attached by FW800 to WD MyBook Pro 500GB, Just started doing this today. (I have 3 of these too, and I daren't even look at the other two).
The Essential has had just about everything done to it - Partitioned at all levels as FAT32; Partitioned as Mac OS Extended (Journaled and not); Sub-partitioned into smaller units, you name it. Nothing makes any difference. Drive hits a wall. Not necessarily at 128GB, and not with any particular file (although a lot of my files are similar - DV, and Photoshop/RAW images), but there's a definite wall in there somewhere. After which, I get error -36 a few times, followed by Finder Hangs if I'm persistent.
I'm going to do a "fill with Zeros" reformat tonight (it estimates 6 hours). We'll see what happens.
FWIW, I thought it might be a 10.4.10 thing, seeing as I'm on my 11th outboard, and this is the first time I've seen anything like this. BIG coincidence after the recent 10.4.10 update (with reported issues on the USB interface) but we've attached the Essential drive to my Partner's G4 (10.4.9) and it fails there too. Could be something, could be nothing.
The weird thing is the MyBook Pro's - I've had them all for a number of months, and they have had varying amounts of data on them, but since I bought the Essential's they've started failing too. By comparison, I have some older Maxtors, and they are 250GB, 300GB and 500GB - all running up to the max and been healthy for 2 years plus.
Like everyone here, I'm scouring every source for a solution, and new "sightings" are popping up daily, so I'll post what I find.
Keep posting, folks.
P.S. Sorry for the long post, but I hope I've used enough description here that people searching for this specific problem will find it more easily - I've read more than my share of unrelated iTunes and Windows SMB posts over the past couple of days.