Yes, it might take a French headset. See

http://www.sheldonbrown.com/harris/french.html#headsets

Have you tried adjusting the headset? It might just be loose. You'd need two 32 mm headset wrenches, or one 32 mm and a 12 inch crescent wrench. Ideally, you should disassemble, inspect, and regrease the headset before adjusting it.