This seems to be the result of the ribbon cable going bad. The first sign is the issue I've described above, but eventually as the cable degrades further, it will stop being able to read any hard drives at all.
From the form post here:
Put the original drive (or another sata drive) back in & see if it works. If not, it's likely a failure of the ribbon cable from the mainboard to the daughterboard that carries the audio & sata ports.
We bought 100 of these units last year & in six months had a 73% failure rate. 87% of the failures (63% overall) were due to that cable failing. It is a known issue that is still recurring. The whole fleet has had the cable replaced twice, some more than that, but several of the replacement cables have failed also.
I would suggest you replace the original drive & have it addressed under warranty. If the machine is out of warranty, lean on them because it is a known issue.
In fairness, I will say that Dell have been very supportive through our troubles, & have worked hard to address the issue for us.