Unable to format disk: 'The system cannot find the file specified'

Run diskpart and perform these commands:

LIST DISK
SELECT DISK x
CLEAN 

(x being the number returned in the first command for the USB disk.)

Close diskpart.

Open Windows DiskAdministrator GUI.

You should now see the USB disk as an empty hard drive and be able to partition and format the USB disk as normal.

I had this issue when the USB key had been formatted with a linux install iso previously. To fix it, I ran the linux fdisk utility, removed all partitions, and then ran:

dd if=/dev/zero of=/dev/XXX count=1 bs=4096

where XXX was sdb in my case.

This wiped the partition table completely, and on new insertion on windows, it was able to do a standard format. I clued in that it had something to do with the partition table, since windows disk manager showed the old partition layout after attempting to create a volume+format, despite the fact that I'd picked a different volume and file system size (i.e. attempting to create a 4G volume and filesystem restored the previous 2G partition in the disk manager display, despite starting from a non-partitioned state).

Just wanted to add another possible reason/solution for this error message. Problem: I had previously used this USB drive as a Chromebook recovery image holder and Win8 was giving me errors trying to format it. XP formatted it ok and showed a drive letter when the USB drive was inserted while Win8 did not.

Solution: I ended up using the Chromebook Recovery utility to erase the USB drive again (even though it had been formatted a few times in Windows) and Win8 was then happy with it again. https://support.google.com/chromebook/answer/6002417?hl=en