Zombie index?

I'm having a problem with an index on a Postgres database.

I created an index as follows:

    create index table1_column1 on table1 using hash (column1);

(column1 is a varchar(70))

I discovered that I couldn't actually use this index for anything; any
query which uses column1 in the where clause comes up with:

   ERROR:  hash table out of memory. Use -B parameter to increase buffers.

I then dropped it:

    drop index table1_column1;

Now, I can't create an index with that name:

   ERROR:  cannot create table1_column1

In fact, the index doesn't seem to be *really* gone.  Any query which
uses column1 still gives that error message.  Whuzzup?