This issue may lead to space being taken from the Windows file system and the database name used unable to be referenced by a further mkdbase.
To recover this first use Windows Explorer with administrator rights to remove the folder, named as used in the failing mkdbase, and then run the following from a Windows Command Prompt.
realreg –d d dbasename – where dbasename is the name of your database.
This will remove the Reality internal information that was part setup by mkdbase.