Hi,
I had a similar experience with my Midjay; my opinion is that you have a problem with the file system of your Audya. You definitely cannot format just a single directory; what you could do is connect the Audya to your PC via USB and run Windows Scandisk, hoping that it will be able to find and correct the problem. Before you do that, however, I suggest that you make a complete backup of your hard disk... just in case!
Good luck
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Korg Kronos 61 and PA3X-Pro76, Roland G-70, BK7-m and Integra 7, Casio PX-5S, Fender Stratocaster with Fralin pickups, Fender Stratocaster with Kinman pickups, vintage Gibson SG standard.