cannot create db in localdb

Hi,
I am getting the following error when trying to create DB in localdb from SQL Management studio:
TITLE: Microsoft SQL Server Management Studio ------------------------------ Create failed for Database 'aaaa'.  (Microsoft.SqlServer.Smo) For help, click: http://go.microsoft.com/fwlink?ProdName=Microsoft+SQL+Server&ProdVer=11.0.2100.60+((SQL11_RTM).120210-1917+)&EvtSrc=Microsoft.SqlServer.Management.Smo.ExceptionTemplates.FailedOperationExceptionText&EvtID=Create+Database&LinkId=20476 ------------------------------ ADDITIONAL INFORMATION: An exception occurred while executing a Transact-SQL statement or batch. (Microsoft.SqlServer.ConnectionInfo) ------------------------------ A file activation error occurred. The physical file name 'aaaa.mdf' may be incorrect. Diagnose and correct additional errors, and retry the operation. CREATE DA ...