Have you tried doing this first:
Repair the Hard Drive and Permissions
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 Utilities menu. After ** loads select your hard drive entry (mfgr.'s ID and drive size) from the the left side list. In the ** status area you will see an entry for the S.M.A.R.T. status of the hard drive. If it does not say "Verified" then the hard drive is failing or failed. (SMART status is not reported on external Firewire or USB drives.) If the drive is "Verified" then select your OS X volume from the list on the left (sub-entry below the drive entry,) click on the First Aid tab, then click on the Repair Disk button. If ** reports any errors that have been fixed, then re-run Repair Disk until no errors are reported. If no errors are reported click on the Repair Permissions button. Wait until the operation completes, then quit ** and return to the installer. Now restart normally.
If ** reports errors it cannot fix, then you will need Disk Warrior and/or Tech Tool Pro to repair the drive. If you don't have either of them or if neither of them can fix the drive, then you will need to reformat the drive and reinstall OS X.
If there are no errors reported then try the routine I suggested rather than trying to expand the existing partition just try to Add a second partition as you have tried before.
If this still gets you nowhere, then I'm afraid you're left with having to repartition from scratch. You'll want to backup the existing files if you don't wish to lose them. I would then do this:
Drive Preparation
1. 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 Utilities menu.
2. After ** 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 **'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 ** main window.
3. Under the Volume Scheme heading set the number of partitions from the drop down menu to one. Set the format type to Mac OS Extended (Journaled.) Click on the
Options button, set the partition scheme to GUID (for Intel Macs) or APM (for PPC Macs) then click on the
OK button. Click on the
Partition button and wait until the process has completed.
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 ** 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.
When the above is completed quit ** and return to the installer. Complete the OS X installation.