SD cards should always be FAT32 formatted. HBC won't use any other format to read apps, so I don't know what you've done.
To USB load GameCube games, it must be:
- FAT32 formatted
- 32k clusters
- First partition
This is true for Dios Mios or Devolution.
We recommend EaseUs for formatting hard drives: http://www.partition-tool.com/download.htm
and the following tool for SD cards:
Format the SD card using this tool as full erase (not quick): http://www.mediafire.com/download.php?66o4q63sa54ad86
See the FAT32 guides and the Dios Mios guides (both linked in my signature) for more information.