Bootcamp storage allocation question

My specs:

OSX: Yosemite 10.10.1

MacBook Air 13-inch, early 2014

Processor: i5, 1.4GHz

Memory: 8GB 1600MHz DDR3

Graphics: Intel HD Graphics 5000 1536MB

I want to apologise in advance in case I have posted this into the wrong area, I think I have put this in the wrong discussion, but I am not entirely sure where it belongs.

My question:

Does Bootcamp storage allocation only work if the hard drive is not encrypted? (if relevant) Does File Vault lock access to drive partitioning when "encrypting"?

Apart from reinstalling Yosemite (which I think may be impossible due to File Vault), are there any other things that I can do?

Context:

Currently I am trying to use Bootcamp. After finally obtaining a 64bit ONLY Windows ISO, burning to USB and the support software for the drivers of bootcamp, I was able to pass into the screen which had the allocation of space for Windows. However when trying to allocate 100Gb for Windows, it prompts the following:

Your disk could not be partitioned. An error occurred while partitioning the disk.

Now my Macbook Air is approximately two days old. All I have done is optimise the lighting and sound, put in a display picture, install steam, install Microsoft office 2011, download and use Xcode, install AVG and Chrome. Foolishly though, I opted for File Vault. File Vault went all the up to the end of the bar but is now stuck at:

Encryption Paused. Connect power adapter to resume encryption.

And refuses to continue regardless of whether or not the power adapter is plugged in or not.

I have verified permissions, repaired permissions and verified the drive (repair the drive is greyed out suggesting that it is fine). I have cleared PRAM although I am not too sure if I should clear the SMC as well.

I have also gone into "diskutil cs list" and the state of File Vault is paused and is not revertible.

I dont have a time machine state as I have not done very much to the Macbook.

I have also accessed the disk utility and tried to manually partition the drive, but I am notified that:

This Core Storage operation is not allowed on a sparse logical volume group.

And the option to resize the partition is greyed out.

My hypothesis:

I am thinking that the reason that the so called "error" that bootcamp has so graciously notified me of, is actually an issue with File Vault locking the disk as it is still "trying to finish encryption". Bootcamp gives me no detailed explanation of the error, but Disk Utility does. So my thoughts are that File Vault is considered to be USING the hard drive and because File Vault is never going to finish encrypting the hard drive, any actions regarding the hard drive (such as Bootcamp) in anyway shape or form, will subsequently be blocked by File Vault.