I am using a 2gb sd card.
You mentioned to format the card to Fat16 but on my Win 10 I get the choices of: Fat(default), Fat32, exFat, NTFS. I picked Fat(default).
FAT is the same thing as FAT16 on Windows. It's the only card format option that will autoboot on older Canon Powershots.
I went to the site and downloaded chimp 0.9.5 and extracted the files to the card plus the other file to the directory. Put the lock in the down position. Powered the camera up (slid the lens cover open) and got a memory card error.
Umm .. you extracted the CHIMP files to the SD card? You are supposed to install it on your PC, run it, and let it setup your card for you.
Repeated all of the above but chose Fat32 in the format option and got the message that the memory card was locked.
Normal - FAT32 will not autoboot so the camera detects that the card is locked and throws up an error messsage. When CHDK autoboots from a FAT16 card, it bypasses that check.
I also tried to update the firmware to see if that would work but in both cases I was unable to get to the menu in the camera display to update.
You probably need to start the camera by holding down the "PLAY" button for a couple of seconds rather than opening the lens cover. That's how the firmware update function is activated on pretty much every Powershot running CHDK.
**My memory card is now screwed as I continually get a memory card error even after multiple re formatting**
Did you try letting your camera reformat the card (via the tools option in the Canon menu) ?