Make sure the new drive is initialized. Sometimes they aren't and until it is nothing will see the drive. Not much of an Apple guy but I know from lot's of experience with Western Digital I would have to hook the drive up to a windows machine with Hard Drive USB reader and use the Disc Management app to initialize the partition on the drive. May be the case you are facing here. Once done I then had no issue installing to the drive etc.
+
+
I know you mention that the OS was able to see the drive at one point. I would just make sure that the drive is showing up correctly and that the partition is fully initialized. Can be done with a $25 hard drive reader and any computer system. Plus it is just a handy thing to have.
Make sure the new drive is initialized. Sometimes they aren't and until it is nothing will see the drive. Not much of an Apple guy but I know from lot's of experience with Western Digital I would have to hook the drive up to a windows machine with Hard Drive USB reader and use the Disc Management app to initialize the partition on the drive. May be the case you are facing here. Once done I then had no issue installing to the drive etc.