Baltwo:
Sorry if I am not being clear. You are correct. The Format type is MS-DOS (FAT), not FAT32 although I believe that is the FAT style it results in. I'm surprised that you don't see a choice for Free Space. I have that listed for all three partition schemes, GUID, Apple Partition Map and Master Boot Record. I have all of the format options you listed below in addition to Free Space.
As far as step-by-step operations, I have connected my external USB drive and attempted to partition and format it in Disk Utility. I have selected 1 Partition and tried a partition scheme of GUID and Apple Partition Map. Both give the same results. I try to format the drive as Mac OS Extended (Journaled).
When I click Apply, DU just runs forever and never formats the drive. I know from past experience that a partition take about a minute so there is obviously something wrong. The only way I can stop DU is to unplug the drive at which point I get a box saying Format Failed. Permission denied.
If I use DU to format the disk as Master Boot Record and select MS-DOS as the format type, DU formats it fine. I've tried just about every other combination and DU either hangs or returns the error message, Format Failed: permission Denied.
Hope this helps.
Thanks,
David