The Droid 3 mounts an installed SDCARD as /SD-EXT which Titanium does not see. You will need to use a file manager and move the files from the physical SDCARD (/SD-EXT) to the internal storage area that is mounted as /SDCARD. Then Titanium will see your backups.
Worked awesome thanks. Didnt realize Droid3 lists its internal as sdcard. Thanks
Droid3 + Root + CWM working great