so is problem resolved, did you select yes and all working? Your USB is not being recognised correctly by the time shift settings. If you followed the instruction in post 5 and still keep seeing the popups then you need to initialise.
go intomount manager and see what the format is for the USB /HDD, if its showing asExt then it should be fine, if its showing as something else then you needto initialise. And yes you will lose anything stored. If you want to makebackups first that's up to you.