Yeah, it looks like some internal symbols were leaked out. Mathematica "localizes" by using naming conventions. To create a unique symbol it appends $n where n is an integer that keeps getting larger to insure no name collisions.
FWIW, I'm not sure how Mathematica will handle the constraints x>1 and y>0 when you're explicitly setting the domain to be Complexes. I don't think that really has anything to do with the specific inability to reduce, however.
