Yep. The CD32 only has 2mb chip. Nothing more
It's for this reason that you have to be clever when selecting what games go onto the CD. Most of the time, I opted for normal Workbench installable games (KickIt rocks!
) as well as JST games, since they're 2mb friendly
For the WHDLoad games I have on there (of which there's many) and the WHDLoad demos, you need to muck around with tooltypes. As I said, it's been a while, but get rid of PRELOAD from any icons that have it, and replace it with HDLOAD and LOWMEM (LOMEM?)....I think these are the tooltypes, but I can't remember
Read the WHD docs