Sounds like the backplane or power delivery is choking under the load of two spinning drives. Those microservers are notorious for weak 5V rails once you start stacking multiple 3.5" disks, especially if the PSU is the original 150W unit. Try swapping the drive positions, if the problem follows the bay you know it's a slot issue not a disk one.
Thank you for the reply. Yes its the 150W stock PSU. As per the other persons post below, using the Molex/SATA power adapter and on board SATA port everything is working fine!