I think you will need to use the attenuation from the mic preset menu, probably at the -18 dB setting. Maybe you could go to -12, but I kind of doubt it. Marantz is a little unusual in how they label these settings; the 0 dB setting is like "high" on many other recorders and the -18 dB is "low"...
If this is the case then I'd trust what aaronji is saying. I don't recall using attenuation, but the 660 and the 661 may not be the same, and it was a long time ago...
FWIW I would always format a card on the actual deck that will be using it.
eman, with my 661 and AKG C460's on phantom I have all my mic in presets for -18 dB, apparently, this is in their literature or I found it in the 661 thread when i bought mine. As Aaron says, it is mainly a Marantz labeling issue, because the only time I recorded at 0 DB I was only able to set it at less than 1 before it clipped or overloaded.
As for formatting, you should look at the recs/specs. I've never used a 32 GB, but do use Sandisk 16 GB cards. I always use class 10 cards as well. I have had one card not format for my 661, it had been used in a digi camera and would not format at all. Try another card. and definitely format in the device.