That doesn't sound good. 108mb is very familiar in the way of hacked player. In players that have had it's memory hacked, a '108mb' result after a format means that it's only a 128mb player. So it never had 2GB at all. All that extra memory was just an illusion, thus causing the 'disk error'. Just to be sure try the 'Remove memory hack' procedure again.
Is it still under warranty? If it is, you might be able to return it for a replacement.
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