I use the below mentioned method to format my pen drive from command prompt:
1. Shutdown the computer.
2. Insert USB Memory Stick into your computer.
3. Power on the computer and then immediately start tapping (F8) key then "Advanced Boot Options" screen will come up.
4. Select "Safe Mode with Command Prompt".
5. After booting to Safe Mode with Command Prompt, if your USB Memory Stick drive letter is (G) for example then type:
G: and press enter
6. Then type:
format G: and press enter
7. If ask you (Y/N) then press (Y) and press enter
8. Now a full format will start.
We are booting the computer to Safe Mode in steps 3-4 so as to override any existing format-restrictions in Normal Mode of Windows.
Note: All the files in the Pen Drive will be removed after Format, so please backup all the data in the Pen Drive before formatting (if possible).
Do reply with results.