reader31: I did try to reproduce your issue and got the same result as you (which is odd because it was working fine earlier in the day, as evidenced by the burn transactions processed and our own testing).
We are taking this up with the Eligius folks and will have this issue resolved ASAP. The good news is that once it is resolved, you should be able to burn BTC successfully, as it appears your setup has been completed.
We are also in talks with some known and trusted 3rd party members of the forums to see if they are willing to perform an XCP escrow/purchase service for folks that don't want to or can't directly use counterpartyd to burn BTC. We will keep you all updated as this develops.