Hi, I had exactly the same problem with my recently bought 7D and the Hitachi 4GB microdrive.
The answer is simple... the index table from the Microdrive is damaged and needs to be cleaned. I also searched everywhere till i figured this one out.
What to do...
1. Download 7Tools Partition Manager :
2. Install it and connect your Microdrive via a CardReader to your computer.
3. Delete ALL partitions on de drive (size 3.82 Gb)
4. Now right click on the drive in the left pane en view the sectors.
The trick:
5. Overwrite the first 20 sectors (two lines) with just zero´s (00)
6. Apply everything and format the drive in your 5D/7D
Et voila...
Good luck ! Aad, Rotterdam, The Netherlands