i know that wb 3.1 recognises harddrives of upto 4 gig and im really not bother about the space i will lose as i plan on installing AmigaOS 3.9 straight on top of wb 3.1 so that i can get access to the other part of the harddrive.
You should skip 3.1 and directly install 3.9. Only with 3.9 you can prep the harddrive correctly.
Use the running system on your old harddrive to create an OS 3.9 emergency disk. Then, when you've replaced the HDD by the new one, boot from the emergency disk and install the HDD from scratch. 3.9's HDToolbox should see the drive correctly if the OS 3.9 ROM update is active.
In the case that you've already done that and it's only Workbench 3.1 which shows the low space, be assured that it's only a cosmetic problem and you don't need to worry. Divide the exact free space in bytes by 4294967296 and check the remainder. It will match what WB displays.
