Note sure what you actually did; the CREATE TABLE statement should pass. It would be easier to make dbo owner of the schema from the start, but it does not matter. Maybe you have a DENY in the mix somewhere.

Anyway, this script runs on my machine without errors:

USE [master]

GO

CREATE DATABASE ST_Demo

go

CREATE LOGIN TestLogin1

WITH PASSWORD='?????????',

DEFAULT_DATABASE=ST_Demo;

GO

USE ST_Demo

go

CREATE USER TestUser1 FOR LOGIN TestLogin1

WITH DEFAULT_SCHEMA=TestUser1;

GO

CREATE SCHEMA TestUser1

AUTHORIZATION TestUser1;

GO

GO

ALTER AUTHORIZATION ON SCHEMA::[TestUser1] TO [dbo]

GO

GRANT ALTER ON SCHEMA::[TestUser1] TO [TestUser1]

GO

GRANT CONTROL ON SCHEMA::[TestUser1] TO [TestUser1]

GO

GRANT SELECT ON SCHEMA::[TestUser1] TO [TestUser1]

GO

GRANT DELETE ON SCHEMA::[TestUser1] TO [TestUser1]

GO

GRANT INSERT ON SCHEMA::[TestUser1] TO [TestUser1]

GO

GRANT UPDATE ON SCHEMA::[TestUser1] TO [TestUser1]

GO

GRANT CREATE TABLE TO TestUser1;

GO

EXECUTE AS LOGIN = 'TestLogin1'

go

CREATE TABLE Customer

(

CustomerID int NOT NULL IDENTITY(1,1),

CustomerName varchar(25) NOT NULL,

StateCode char(2) NOT NULL,

CreditLimit money NULL

);

GO

REVERT

Go

USE tempdb

go

DROP DATABASE ST_Demo

DROP LOGIN TestLogin1