I just had the same issue today, in my case it was due to the fact that I restored to my Publisher 2005 a sql 7 database that had been previously published for replication. The error was prompted every time I tried to drop or create any other subscription using the Merge Wizard, basically every action I tried from the replication wizard failed with the error stated above.
After I ran sp_removedbreplication on that DB, the problem dissapeared, I could add subcriptions and publications to the rest of the databases.
Hope this might help someone, I spent a good deal of time to find it.
Thanks,
Jose