Guy, possibly another project was created with the same project key 'GS' and deleted before you ran into this issue. When a project is created, it automatically creates a repository if you're running Subversion, but when you delete this very project, it does not automatically delete the repository. So, if this is the case, JIRA will complain about a repository with the same key of the project you're trying to create right now.
Note that this will only happen if you're running Subversion within your OnDemand instance.
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