Technically true but misleading. It's true in the same sense as "if I plant evidence to frame you for murder, you could be found guilty of murder". I mean, sure, but that skips over the bit where the prosecution has to prove to a jury, beyond reasonable doubt, that you did actually commit the murder. Or in this case, that the hard drive is filled with encrypted data and that you have the key to it.
In particular, the implication that if the police find some random data that they think is encrypted, you can be convicted just on the assumption that it's encrypted and that you have the key to it (unless you can prove otherwise) is false. If there's enough evidence to raise a question about whether you have the key to something that could be encrypted data, the burden of proof is on the prosecution to prove you do have the key to it (and therefore that it is encrypted data) beyond reasonable doubt: s.53(3) http://www.legislation.gov.uk/ukpga/2000/23/section/53
(to be clear I definitely do agree it's a bad law, just not for burden-of-proof-reversal reasons)
The result is that either the law has no practical effect because anybody can claim they forgot, or the courts fudge the requirement to prove that beyond a reasonable doubt in order to give the law effect, and then you put innocent people behind bars because they really did forget.
They'd ask you to provide actual readable files, pictures, etc, or else would reject your "decryption".
If you intend K to provide "perfectly readable output", then
(1) if you actually produced the contents of D yourself to hide data, then you need to come up with some scheme so that K provides "perfectly readable output" and some alternative V provides D XOR V (or another decryption scheme) that gives you your actual secrets. I don't think it's that easy to have "perfectly readable data" on D XOR K plus have your secrets with another key. Except if you mean through steganography, but then K is not needed at all.
(2) if you were just send a random noise drive to "frame you" then you need access to the drive to come up with a K so that D XOR K decrypts to valid data.