Ok, I'm giving my answer with a little less confidence than normal, because I cant seem to wrap my mind around how this could happen, and even if it could, why you aren't getting so many errors as to not be funny... Anyway..
According to your fdisk report, you have 1, 2 gb partition that is active(Bootable) and the remaining amount of space is unpartitioned.
You now have 3 Choices (in my opinion)
1) Simply go back into fdisk and make another primary dos partition with the rest of the 36-37 gb's , doing this however will create a drive D with the space not combine with the already existing C.
2) Boot disk > Repartition and format everything into one big drive
But I really don't like to recommend the wiping of an OS so I would personally not do this one.
3) Use a partition manipulation program like Partition Magic to try to make one big drive (I have no experience in this program so I cant help you there, but I'm sure there is documentation for it.) The only problem is I'm not positive it can do it, and it costs $.
If you don't have an aversion to two drive letters on your system I would go with choice #1 and just start installing future programs to your new 36-37 gb D drive.
Also note: Use windows Fat 16 to Fat 32 converter program if you go with choice #1 , Fat32 is better than 16. This program can be found in Start > Accessories > System Tools > Fat Converter ? (Something like that anyway)