FAT32 volume/partition MAX SIZE=8TB, so that's not the problem.
One other possibility (although I doubt it in this case) is that certain USB mass storage devices don't cope well with very large disks (like 128GB limit, etc), but yours isn't that large (30GB right?)
Yet another possibility (although I highly doubt it in this case) is that drive was "soft clipped" with the native ATA command set (I think it's HPA - host protected area). You can use tools like MHDD to unHPA the drive. Same can be done with SCSI disks, although I forget the correct term used for that case. The tool for that case is SCU (SCSI Command Utility).
EDIT:
Or another form of that: what pyrre suggests in the post below. Duh! Thanks pyrre!
Maybe try partitioning with another program?
Reference:
http://en.wikipedia.org/wiki/File_Allocation_Table
