Picassa doesn't actually store your pictures; Windows does that. Picassa just acts as a catalogue system (with a few fancy extras).
When you disconnect and reconnect a removable drive, you can't guarantee that it will always be assigned the same drive letter by Windows (it depends what other removable storage you connect, and the order in which you connect it).
It's possible that the removable drive has now been assigned a different letter from the one it had when Picassa catalogued the photos. If that's the case, then the pictures will still be there, but Picassa will no longer know where to find them.
Try connecting only the drives that were present when you catalogued the photos, and restarting the machine.
You can tell Windows the letters that you wish to assign to a particular drive as follows:
Right-click My Computer (Computer under Vista or Win7)
Choose Manage
On the left, click storage/Disk Management
On the right, locate the external drive and Right-click
Choose Change Drive letter and paths.