Just curious, but why would you want to install an xci? They are meant to be mounted so there's no installing needed and it saves space. Unless, of course, you just wanted it to launch it without having to mount it first. Option is obviously yours.
Anyways, the HDD needs to be formatted to exFat, not NTFS. You should be able to plug the HDD directly into the dock and the album/SX installer/Tinfoil will scan it and see it.
Edit: Also, make sure your folder structure is correct. Folder structure for SX installer should read:
USB:/sxos/xci/xci's here
USB:/nsp/nsp's here
USB:/updates/updates here
USB:/dlc/dlc here