We encountered this issue on one of the Citrix Servers (version: Citrix Presentation Server 4.0). Apparently there was a problem with the account used for the Citrix Print Manager Service. By default this is Ctx_SmaUser. After changing log on as to Local System Account Auto Creating printers worked again.
After using the CTX_SmaUser Re-creation Tool, the normal situation was restored: the Citrix Print Manager Service used the Ctx_SmaUser and the Auto Creating functionality still worked. Run this tool from the Cmd prompt on the Console (or Console session) – not from an RDP session. See http://support.citrix.com/article/CTX111464 for more info.