When mounting the Hdd onto /opt, I followed the instructions in thread http://wl500g.info/showthread.php?t=5909.
In this thread, it performs the mount operation using the following line:
mount /dev/discs/disc0/part1 /opt
If I change this to:
mount -t vfat /dev/discs/disc0/part1 /opt
...it works a treat and all my file- and foldernames are back to their usual length including new files and folders!