Can't format SD Card after OS X Lion update to 10.7.4
There are two likely possible causes for this:


It's a hardware fault that just showed up, or
It's a bug in OS X 10.7.4.


The best fix for both of these (currently) is to visit your local Apple Store's Genius Bar. In case 1, they'll fix your SD reader. In case 2, they'll pass the bug in OS X up the food chain so it can get fixed in 10.7.5 (they'll probably try to fix the hardware, too, just in case).