I had this Problem too so here is the solution:
1. Plug the USB cable
2. Turn the GP32 on, set it to pc-link mode
3. Format the SMC card and it will tell you error!
4. Shit on the error message.
5. Format again repeat step 1-3 until you can expand the main folder by clicking on the little plus (at the folder-tree on the right side of the pc-link Software)
6. Install Freeloader software try if it works else turn off and repeat step 2-6.
7. copy bios dumper to gpmm directory and close the pc-link software, now start the bios dumper.
8. go to pc-link mode again, copy fw.bin to your harddisk.
9. copy bios flasher to gpmm, copy multifirmware to root directory, run bios flasher
10. pray that it works!
11. connect only with pc-link-bios by Darkfader from now on.
12. cry out hossiannah and send me thank you.
Hope this can help You.
P.S. Read the readme.txt of every program I described to use, for detailed instructions hot to use them.
Dont be disappointed, it took me one week to master this bit**, cu**, a*shol*, sh** problem, your SMC is not broken dont believe them.