Reformat ext2 disk with Disk Utility Fails - How to?

You will need to first repartition the drives;

Extended Hard Drive Preparation

1. Open Disk Utility in your Utilities folder. If you need to reformat your startup volume, then you must boot from your OS X Installer Disc. After the installer loads select your language and click on the Continue button. When the menu bar appears select Disk Utility from the Installer menu (Utilities menu for Tiger or Leopard.)

2. After DU loads select your hard drive (this is the entry with the mfgr.'s ID and size) from the left side list. Note the SMART status of the drive in DU's status area. If it does not say "Verified" then the drive is failing or has failed and will need replacing. SMART info will not be reported on external drives. Otherwise, click on the Partition tab in the DU main window.

3. Set the number of partitions from the dropdown menu (use 1 partition unless you wish to make more.) Set the format type to Mac OS Extended (Journaled.) Click on the Options button, set the partition scheme to GUID (only required for Intel Macs) then click on the OK button. Click on the Partition button and wait until the volume(s) mount on the Desktop.

4. Select the volume you just created (this is the sub-entry under the drive entry) from the left side list. Click on the Erase tab in the DU main window.

5. Set the format type to Mac OS Extended (Journaled.) Click on the Options button, check the button for Zero Data and click on OK to return to the Erase window.

6. Click on the Erase button. The format process can take up to several hours depending upon the drive size.

Brian Guam Engineer wrote:
I have two 750gb Seagate drives that I installed in a D-Link DNS-323 network drive (NAS). They got formatted by the D-Link as ext2 (I think a Linux format).

I've replaced the drives now with larger, and want to use the 750's in a desktop Mac. However Disk Utility, while seeing the drives just fine, will not format them as OSX "Extended" drives.

Must be a flag or something that needs to be reset. Any solutions would be appreciated.

The easiest way, IMO, would be to connect them back to a Linux box and erase them completely.
At least that way you know where you start from.
You can also right click the drive icon and check the permissions or use the terminal to verify their status.
You might also be able to erase them from a terminal without having to do anything else.