Answering here as well, since we resolved this on github as well:
Unfortunately that is a known issue with 0.12.2 on GKE that we found
shortly after making it available. We've since pulled that release
from GKE but clusters that are still running it won't be able to
create external load balancers.
Your best bet is to create a new cluster (the default is now 0.13.2)
which has this bug fixed.
And if you need to fall back to an older version:
You can choose the cluster version on the command line with
--cluster-api-version:
https://cloud.google.com/sdk/gcloud/reference/preview/container/clusters/create
We have a downlevel version available (usually). Also, 0.13.2 is
default as of yesterday afternoon, and because of this issue, 0.11.0
remains our downlevel version.
(FWIW, if you're interested in assistance from the Kubernetes team, we obviously monitor github actively, we pay attention to Stack Overflow under the "kubernetes" tag, and of course you're welcome to join the #google-containers IRC channel on freenode.)