Little more information:
The recycler folder contained another 'system' or hidden folder: S-1-5-21-4284871040-378389659-3236199228-1006
I have 'view hidden files and folders' turned on so I could see it. The contents of this folder were indeed all the files and folders I had erased from the external hard drive. I just opened this cryptically named folder, selected all filed and folders and deleted them.. and poof! All that lost space has instantly reclaimed.
It had nothing to do with backup systems.. I had been using this external drive to save my media files, which I had manually copied over from my system. Over the last week, I had been doing a lot of cleaning up, and thus had filled up the Recycler.