You've got the infamous 8.4 G limit. See http://oss.sgi.com/LDP/HOWTO/Large-Disk-HOWTO-4.html
Bottom line, your BIOS can't deal with it, but any modern kernel can deal with it. I don't know why your Ubuntu format is stalling at 36%; you might want to give us the version you're using... and you might need to use fdisk manually to setup the drive. I *think* you use the "alternate" install disk for that, but I'm not a Ubuntu expert.
You might also check the manual of your drive and make sure there aren't any settings/jumpers for this situation. Setting your BIOS settings manually might help, if it's possible, and I suppose there might be a BIOS flash upgrade for your system, but that's another whole can of worms.