I just had the same problem with a 64GB USB3.0 drive. I downloaded a FAT32 format app that was supposed to be able to format drives larger than 32GB, in FAT32. It formatted the drive successfully but when I tried to use the drive again it was "write protected." Could not access the drive at all to do anything with it much less format it. The fat32 format app would not work either. I was thinking that I would have to RMA the USB drive but I thought just maybe, I had Acronis True Image and tried the "add new disk" option and it worked. Created a new MBR partition which could be accessed again.
Now the problem of formatting a larger than 32GB disk to fat32. I found this decent app and it handles formatting large partitions greater than 32GB in fat32 very well. Up to 2TB drives, supposedly.
http://download.cnet.com/HP-USB-Disk-Storage-Format-Tool/3000-2094_4-10974082.html