Try going through Ebay. That is the only place I have seen them in small sizes. I tried another 64MB one I have I get the same errors. It is a new card though. The one I have that works has an allocation size of 2048. I believe the limits of FAT are what is preventing you from using a 256MB card.

Note that the FAT and FAT32 files systems impose the
following restrictions on the number of clusters on a volume:

FAT: Number of clusters <= 65526
FAT32: 65526 < Number of clusters < 4177918
Format will immediately stop processing if it decides that
the above requirements cannot be met using the specified
cluster size.

I'll see if I can get my new MMc card to work.