I just ran into the same problem..checked the Membership table and noticed that, though my code changes the email if a customer so wishes, it doesn't change the 'loweredEmail' field. I then updated the LoweredEmail field to Null, and the system allowed me to enter a new user with that address.
It should be useful to be able to find deleted customers from the administration section, since an administrator should not have to handle data directly through the database.
I ran into the same problem and I deleted it manually, but this is not user friendly at all.
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