You guys are right, there is still a defect. You can workaround the issue. I had worked around the issue and deleted my YouTube channel.
Creating another channel does not exhibit this problem as my Google Apps domain account still has a YouTube profile.
To workaround the issue do the "Make me a channel" page by providing a YouTube username, birth date, gender, etc and submit. You will be logged out of your Google Apps account.
In another browser tab, log into YouTube with your Google Apps domain account.
Return to the previous tab and use the back button to go back a page. Click the submit button again, it should be successful.
Lousy workaround.