How big is the external drive?
If the free space is around 1 TB or more, then pse 2 can't see the drive and gives that scratch disk is full message.
At the time that pse 2 came out, very large hard drives (over 1 TB) were very uncommon in run of the mill computers.
(versions of pse, 3 thru 12 don't have that problem)
You would need to save the files to your c drive and then copy them to your external drive.