Ok, for the first problem it appears that when the mud is shutdown the player is never properly removed from the party. This leaves the channel for that party in their save file which is then re-added to their channels list when then log back in (didn't think to check to see if the channel still worked). Now when the same player issues the part create command, it calls PARTY_D->eventCreate() which in turn calls PARTY_D->CanCreate(). This function checks to see if the player already has the channel for the party in their list and if so, says they can't create the party because the name is in use. I tried creating the party with another character and it worked fine.
As far as the second issue is concerned, I'm guessing their is a hidden channel called test that is common for intermud. When creating a party it must check for the preexistence of a channel and simply attach to that. In this case, it's an intermud channel. At least, that's my guess. Haven't really had time to look into it.