I think the answer is "yes" -- but you have to be careful, since GB installations can be a little delicate (if you knock something out of joint without knowing it, it can be hard to figure out what's gone wrong.
The iLife '06 installer gives you the option to install the Apple Loops to any location, including an external drive. Perhaps the simplest solution is to reinstall GB and choose the specific path for the Apple Loops in the installer.
There is a 3rd-party app called GarageBand Anywhere which will move an existing GB installation in its entirety to another drive. I used this with GB2 and it worked fine until I ran another installer for some software instruments which assumed default locations for GB's support files, and messed everything up. Tracking down all the aliases GB Anywhere had left to point to the new locations for the support files so that I could eventually re-install with GB3 was quite an adventure ....
Alternatively, you might get away with just moving the Apple Loops folder off to wherever you want and making a single alias with the same name as the folder to leave in Library>Audio. I
think that will work, but I won't make any warranties about this! Reinstalling GB3 to place the Loops in a new location in the approved Apple way is probably the safest bet.
(One handy feature for GB4 would probably be an integral GB utility that gives users more flexibility in moving bits of their GB installation around as they change the configuration and number of their available drives after the initial installation.)
Cheers,
Carl