srinathtk, I hate to say this but you may have a hacked player. To check remove any files from your player that you wish to keep, open the MP3 Player Disk Tool and go to the Partition Encrypt tab. Move the slider all the way right then back all the way left and press the start button.
If your player is hacked this will create a new partiton on your player and then format the drive and the hack should be removed and your chip reading the correct size.