AFAIK, although firmware 1.02a added support for 1TB+ HDD's the problem still occurred. D-Link Engineering will better explain the "stall" at 94% during format; it's been a long standing issue on the DNS-343 (and DNS-323) with 1TB+ HDD's.
As for the loss of Volume_1, it's happened to me as well. Take a moment to verify the HDD manufacturer website to confirm that your HDD's are at their latest firmware level. For example; several months back, Seagate released firmware updates to some of their Barracuda 1TB+ HDD's to address some critical issues ... updated the HDD firmware and all has been good.
HTH,