Abear,
If you are using QC 11, then this is the issue with QC which somehow HP don't accept. After getting the error, if you come out of customization & then go back again, you will see that list is created.
To avoid this error, go to Project Lists first. Create the list there. After that create your user defined field & then select the list from the options available. Since you have already created list, it will show under drop-down & you can select.
