I'm trying to find a secure and convenient way to encrypt my external disk with TrueCrypt. Currently I use a 50 character strong password but I'm tired of typing it every single time. I have a Yubikey and several USB sticks that I can dedicate for this task so I think I can harness two-factor authentication. I listed a couple of solutions and the best one I could come up with is below. Before doing anything I decided to get some expert opinion.
The ideea is using Yubikey with a static strong password. This will be something I have. Also I'm planning to use keyfiles stored in a USB memory stick. The USB will not be encrypted but there will be hundreds of small files. And I will be using a small combination of them. So this will also be something I have but the combination will be something I know. So even if someone manages to get hold of both items they won't be able to mount without the combination. Say if I have 100 files on disk and I use 3 files, there will be 161700 combinations.
From a convenience point of view, I'll have to plugin both devices. Touch the Yubikey once and select the keyfiles. It still doesn't sound very fast and easy but I'm hoping it'll be less painful than typing the password manually.
What do you think about this method? What would you propose to make this approach more secure or more convenient (without making it less secure) ?
Thanks in advance.