Sorry, a mysql user with the name x already exists.
grep -Rl USERNAME /var/cpanel/databases/
Firstly, check a second time for any MySQL user by that name:
mysql> use mysql; mysql> select User, Host from user where User like '%USERNAME%';
After confirming that no MySQL user by that name exists, look in /var/cpanel/databases/users.db. If the user is listed there, remove it.