Username & email address 'already in use' msg - when they are not already in use!

Just installed the membership plugin on a new site, and in testing, no matter what email address or username I enter, the system gives me the message "sorry that username/email address is already in use'......and they are not!

PLUS - the system is actually these members up and sending out the emails to the new member.......

The second problem is that once you are inside the member area (yes, you actually can login as a member even after getting this message!), when you click on the link to create a new blog....the page that you go to is not showing the entire form - is this a css issue with the BP business theme? If so, I will post there regarding this issue.

here's the page for the blog signup:

Thank you!