Now I understand what is going on. It looks like you found a bug in TeamPulse. The root iteration should be "Project" and not "Accelerator".. Can you open the Area/Iteration Manager, select the root iteration that you have named "Accelerator" and rename it back to "Project" ... then try to create your story in TFS and try to sync? It should work.
It was not intentional to allow users to rename their root iteration as we rely on it being unchanged for specific scenarios.
I have given you some Telerik points for bringing this to our attention.
All the best,
the Telerik team