Can't Backup to Time Machine with Snow Leopard

I have a Apple Time Capsule which is used as a Time Machine Backup Facility and also a Wireless Hub for File Sharing and Internet Connection.

I've been using Leopard for a couple of years without any significant problems.

The other day, I installed Snow Leopard and suddenly, I'm facing a number of different problems and errors regarding backups to the Time Machine with the Time Capsule.

First, I was facing problems with a Case Sensitive error and now that I have ejected the Time Capsule, the Disk Utility has come up with a different name altogether and now I have the added problem of disk space on the time capsule.

I know I could re-format and start over but that would defeat the whole point of my backups.

The Time Machine/Capsule should re-write over the old backups when making space for new ones but its just giving me an error about not enough disk space.

Anyone know how to fix these problem(s)?

JH

PS: See attached image.

 

ok, the disk space error seems to have gone but how do I solve the Case Sensitive error?

See attached.

 

When I look at the console (after initiating a backup), I get this:

18/Feb/2010 18 Feb - 15:57:15 com.apple.backupd[9589] Filesystem of Backup of Jet's iMac is case sensitive, but the backup disk is not.

18/Feb/2010 18 Feb - 15:57:20 com.apple.backupd[9589] Backup failed with error: 23

18/Feb/2010 18 Feb - 15:57:21 UserNotificationCenter[9615] __CFServiceControllerBeginPBSLoadForLocalizations timed out while talking to pbs

18/Feb/2010 18 Feb - 15:57:35 com.apple.backupd[9589] [SnapshotUtilities mountPointForVolumeRef] FSGetVolumeInfo returned: -35

18/Feb/2010 18 Feb - 15:57:35 com.apple.backupd[9589] Failed to eject volume (null) (FSVolumeRefNum: -173; status: -35; dissenting pid: 0)

I also get this:

18/Feb/2010 18 Feb - 15:57:15 com.apple.backupd[9589] Disk image /Volumes/Jet Time Capsule/Jet's iMac_001ec20c175c.sparsebundle mounted at: /Volumes/Boot OSX

Any idea what this means and what I can do?