Hi @kseadawy
This is a known issue. FME Server is only supported on Windows 64bit, not 32bit. Our Technical Specifications page has been updated to reflect this.
As you've found out, what runs the job queue requires 64bit which is why this will not work on 32bit systems. The 32bit version you've found is an older version (3.0) than the 64 bit version that we are shipping (3.2). I am glad this working for you now, but should you run into any issue I would advise you to install on a 64bit system.
If you need access to a 32bit engine for FME Server, due to format restrictions, you can distribute your engines and install the 32bit version, but this needs to be on a 64bit OS. Different engine bit versions need to be on different machines.