For Daniel and other interested, Nancy was able to solve the issue by doing 3 things:
1) Copying the utilities folder to the current directory In addition to copying its content in the same folder.
2) Including the SD.h in addition to the SD.cpp
3) Transfering the whole directory to a file path that has no spaces.
Note that #3 is always necessary to make things work due to the use of GCC. In this case i think #1 (and perhaps also #2) made the trick.
i don't know how to make it work with external mode and i am sure is not easily doable with this method. It might be not even feasible. I'll let you know more if i find anything.
Also, if i don't know what error it is that you are finding, it's hard for me to have a clue :)