...Oh, one final remark - if I should copy and paste your script in SSMS and execute it, I would actually get a different error: "Could not locate entry in sysdatabases for database 'TempDB'. No entry found with that name. Make sure that the name is entered correctly."

On a server with a case sensitive collation, database names are case sensitive as well. You should use all lower case for the system databases tempdb, system, model, and msdb.