Well, that first 11 gig is what you lose when you format. It seriously takes that much space for formatting information (at least that's what they tell us). I lost 9 gig on my 120, so yours is not out of the ordinary in that regard.

Also, using FAT32 is definitly a large problem. Fat32 should NEVER be used on a partition over 31.*** gigs because it doesn't work right. Maybe someone else can explain why as I have forgotten the techincal details of it, but as an example windows XP won't let you format anything over 30 GB with Fat32. I would say a reformat using NTFS or ext2/3 or JFS or whatever you want to use that supports that large of partitions.