Snapshot showing disk layout and error message: http://www.flickr.com/photos/rnayar/10457372744/
Partition Wizard help you to create partition http://www.partitionwizard.com/partitionmanager/create-partition.html
The problem is that there are partitions located after the partition you are trying to create, and Windows' own disk management software cannot cope with that. Using Easeus Partition Manager as Hovsep suggests will solve the problem.
some oem hard drive pre-partitioned can have problems with windows disk management.
i think Four primary partitions or volumes you can have max.
Primary Partition, Logical Partition and Extended Partition (Disk Partition Basic)
have you tried Easeus partition manager?
hirensbootcd, you can use livecd to do this operation