richierich,
You need to verify your chip capacity by removing the back of your player and checking the memory chip serial number against this list
HERE.
You can generally fix the dual drive thing by going Settings>Online Mode and make sure it is set to "Normal Only".
Try doing a double format with the MP3 Player Disk Tool, by going to the Partition Encrypt tab and moving the slider all the way right and format then all the way left and format again.
Let me know your findings.