27" iMac not sharing External Drive with Macbook Air

I am currently running a 27" iMac with OS X 10.7.3. I have to extenal drives hooked up to it via USB. A western digital my passport 1 tb drive that is formatted and used for Time Machine. As well as an older western digital 1 tb drive (not sure the model, its slightly larger than the my passport and black). The older WD drive has pictures and music stored on it. This drive is formated MS-DOS (FAT32). My issue is that I also have a 13" MacBook Air, also running 10.7.3, does not see the old WD drive. Within Finder I can connect to the shared iMac and login as my user name, when doing so i can see the iMac HD as well as the WD My Passport setup for Time Machine. Problem is I can not see the other WD drive. When I got to system preferences --> sharing --> file sharing, I have the older WD drive shared with Everyone, and other options for sharing that drive I have both check boxes checked (Share files and folders using AFP & Share files and folders using SMB)

If anyone can shed some light it on this situation it would be appreciate as it is not making much sense to me.

Ian