Here is the snapshot of SSAS 2008 connection in SSMS.
In order to fix the deployment error, I stopped the SSAS 2012 Service and tried to deploy the SSAS 2008 cube in BIDS. This time the deployment worked fine, the database got created. It seems like when one has 2 installation of SSAS which are different versions and modes there seems to be a conflict while deploying the cube in BIDS 2008. In SSAS 2012 I had the tabular version installed, when i connected to SSAS 2012 using SSMS , please see the image below, it has only one folder called databases.