It must be an intermittent bug, or not affect everyone, since I have no problems with the DMF fight (watch, I'll have loads of problems next week
The only time I've seen the "Failed to create pet battle" is when it's close to a system restart. If I'm trying to get that one last battle in, I might get kicked out of a fight, and unable to start a new one, even though it's still 8 or 10 mins til the restart.
OTOH, I have had the game crash any number of times when I'm accepting and leaving fights a lot when rare hunting, or because a tamer fight doesn't go the way I expect (like 5 misses in a row on Dive.. I just leave and restart). When that happens I have to restart my computer too because the system doesn't believe it has any video memory to use.
In any case, maybe try rebooting your system before you get into WoW so there's nothing lingering in memory. Also, make sure you've got a decent conn. I think a friend of mine sometimes has issues, but she's got notoriously lousy internet.