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Sorry I should've included more details. I've just replaced the HD in my 1.83Ghz Macbook with a Western Digital 500GB scorpio blue SATAII (internal). When I try to partition and format the drive using OSX tiger disks it thinks the drive is 3.6TB and returns the error messages you described in...

Hi. Sorry to barge in on this thread but I've been having exactly the same problem. Did you find a solution?