The "cannot find team project" error condition is sometimes a symptom of having a client-side metadata cache that is out of sync with the server.
We can try to determine if the cache is the problem by moving it out of the way.
- Shut down all running instances of Visual Studio on the client
- Open \Documents and Settings\<user>\Local Settings\Application Data\Microsoft\Team Foundation\1.0
- Rename the Cache subdirectory Cache.sav
- Open Visual Studio and retry project creation
The TFS restore instructions include a section that describes how to invalidate the client side cache of all machines connected to a server. See the section entitled Refreshing the Data Cache on Client Computers in this topic: http://msdn2.microsoft.com/en-us/library/ms252458(VS.80).aspx. This handles the case when a server is restored to a point in time where the metadata on the server does not match that stored in the client caches. Another situation where this metadata cache mismatch might occur is when copying a Virtual Server image with TFS installed. The reason that it might happen in this case is that the client caches are keyed by a TFS server GUID. A client machine connecting to the "same" TFS instance in different Virtual Server images will ultimately end up with mismatched metadata as the servers drift apart.
From: Bill Essary MSFT