Great thread, really helped me with a 4GB flash drive (not Kingston) that would only format to 200Mb in Windows. For info, it appears that you must run PTEDIT in Compatibility Mode when using Windows 7 (I have 64-bit), but setting the compatibility option to 'Windows XP SP3' works fine.
MOST IMPORTANT - the string from Hitman above is missing a digit! It should read:
and then all other lines to zero.
This really works! I can't believe this is the only thread I've found where this nightmare scenario is discussed!