No, no Catch 22 here.
These two scenarios work, choose whichever you prefer.
Use System Image
1.) Old D: drive connected, create a system image including the system reserved partition and drives C: and D: (tutorial)
2.) Empty the new drive (delete all partitions) using disk management
3.) Disconnect the old D: drive, replace it with the new drive
4.) Restore the system image you created (tutorial)
5.) Boot normally, Windows should work now. Notice that the new D: drive has same size than the old one, rest of the capacity being unallocated. You can now extend the disk ti utilize all of its capacity
Move Users folder temporarily back to C:
1.) Follow the instructions here to move the Users folder back to C: drive, replace the D: drive and relocate users again back to D:. Notice that the tutorial in question is for Windows 10, and these specific instructions for a situation when you are unable to upgrade Windows because the Users folder is relocated, but the instructions also apply to your case, replacing a drive containing the Users folder.
Ask if something is unclear.
Also, if you go to Disk Management when booted with the old D: drive connected and change the CD/DVD letter to anything else than D or E, it then shut down and replace the old D: drive with the new one, the CD/DVD should keep the new letter and automatically assign D: to your new HDD: