Edit: "the drive sporadically quit working again. I went back into bios and deactivated allow Dell type c dock again and the problem was fixed on reboot. So for now I believe my problem was due to this setting, and likely the driver/bios updates as well"
I got my thunderbolt 3 / USB c port working today. Dell XPS 15 9560 touchscreen model (2017). I've been constantly up to date on windows auto updates, not sure of my version but as of today it's up to date as always. I visited Dell support page and installed the auto detection software. I was due for a bunch of updates about 17. One was updated bios, another was thunderbolt 3 drivers. Reboot and no luck. I ran the auto detect again and it gave me two additional updates. Reboot no luck. Now I'd already gone into bios pre updates and modified my USB and thunderbolt settings as follows. Under settings system config USB config both options are checkedThunderbolt adapter all three options checked, security level no security. No luck, after all the updates I re access bios settings and inDell type c dock configuration I disable always allow Dell docks. This setting is directly related to the thunderbolt port and after disabling my external HDD was recognized on start up. I've gone back and re enabled this setting and the device is still connecting and disconnecting without issue. The only other thing I did was to go back to Dell updates and drivers and under the manual updates are a (since my auto updates were marked complete) I chose the Dell XPS 9560 section rather then the list of updates for "this device" and downloaded and installed Dell command configure application. Hope this might be of some help to anyone else who runs into thunderbolt 3 problems on Dell XPS 9560 laptops. I had opened a support ticket by email with Dell and will update if they have anything meaningful to say. Dell representatives are invited to comment and further address this issue we have all been having.
Dell XPS 9560 thunderbolt 3 problems solved