Finally! After rummaging around the Sims forums every day for ages, I have finally found something that works!
Kate, if you haven't already gotten a solution, check this out:
http://forum.thesims3.com/jforum/posts/list/38896.page
In case the link is being anal - you never know - here's what they say:
We are now aware of a Mac OSX problem reported on Mac forums where user's hard drives somehow become hidden on their computers. This makes it impossible to install The Sims 3 and possibly other application to that hard drive. A solution that has worked is make your hard drive visible again following these steps:
0. Take any CD's / USB drives / iPods / connected disks out of the machine.
1. open Terminal (Applications/Utilities/...)
2. make sure you are using an Administrator account and have the password
3. type the following:
ls -lOd /
(That's lowercase ell, lowercase ess, space, minus, lowercase ell, capital oh, lowercase dee, space, forward slash)
4. You should get something like this:
hostname:~ username$ ls -lOd /
drwxrwxr-t@ 32 root admin hidden 1156 Feb 8 20:35 /
(note it says "hidden" instead of "-")
5. To fix this, type:
sudo chflags nohidden /
6. Type in your password when prompted.
You should now be able to install to that hard drive. If you have partitions on your machine, you will need to unhide all the drives using:
sudo chflags nohidden /Volumes/*
Be sure to post if it works for you, too!