What does "EFI system partition couldn't be created" mean?

Set your Disk utility in to Debug mode.

Now you should be able to "see" the hidden partitions like EFI and the Recovery HD.

To enable the Debug mode use your Terminal:

Enter the following command at the Terminal prompt:

defaults write com.apple.DiskUtility DUDebugMenuEnabled 1

Needless to say, there is a reason for those partitions to be hidden, so do not mess around with them on your start up disk.