So uhm, I'm confused. Why did you reformat your PS3? You can have multiple accounts on one PS3 - I have my US and EU accounts on one machine.
But, that's kind of an aside - as you say Xenogears is directly downloadable to Vita. You didn't need to download it to a PS3 (or PC), you just need to log into a US account on Vita and click download.
It is a chore, I'll fully admit. Come to the Vita thread next time and ask, I'm sure someone would've been able to give you advice that would've saved a great number of these steps. Or just google beforehand, there's plenty of info out there telling you that you can't use euro credit on us dollar american accounts.