Well, being bored here at work, and having the wonderful WBR-2310 to run virtual servers and what not, I was able to solve the problem remotly.... I reset the box back to factory defaults for the second time, and formatted both drives, no problem. DOH! Forgot it was still running 1.04, so I did something stupid (yeah yeah yeah... I know), and upgraded the firmware remotly, success....
Well, ok, insert foot into mouth..... Just reomtly logged into the config page, and checked status.... Kind of odd that there is still 107 Gigs in use on Volume_2 after it was formatted..... and also odd that identical drives show different total capacities...
Total Drive(s): 2
Volume Name: Volume_1
Total Hard Drive Capacity: 491721 MB
Used Space: 2 MB
Unused Space: 491719 MB
Volume Name: Volume_2
Total Hard Drive Capacity: 490402 MB
Used Space: 107680 MB
Unused Space: 382721 MB
After another format (well, 2 actually, first one was JBOD.... opps...) I am not good to go.... Hope this helps anyone with the same issue....
Total Drive(s): 2
Volume Name: Volume_1
Total Hard Drive Capacity: 491203 MB
Used Space: 24 KB
Unused Space: 491203 MB
Volume Name: Volume_2
Total Hard Drive Capacity: 491203 MB
Used Space: 24 KB
Unused Space: 491203 MB