I had almost the same issue, it turns out the Group permissions are read-only, and you cannot get them right again - UNLESS you change the UUID of your USB-stick.
See my question and answer here:
USB stick read only
After changing the UUID and reformating the disk everything works normally again!
Do try without reformating, and then change the group-permissions to Read-Write! Have not tried this, but it should work!!
So that didn't work, then we have to use the big Terminal hammer:
[Ctrl][Alt]t brings forth the terminal so enter:
sudo dd if=/dev/zero of=/dev/sdx bs=512 count=16
This will erase the start of the USB-stick. this solution I got here:
Refurbishing the USB-stick
Now you should be able to format it to fat32 - or something else without any further trouble!