Symptoms
Cannot install with an existing database, although the SQL user and Windows user have dbo rights.
Diagnoses
The install account needs to be the one to create the K2 database. K2 is unable to install to a pre-existing K2 database unless in an 'upgrade' action, which requires all artifacts to be there from a previous version of K2.
Resolution
Allowing the K2 install account to create the DB via the installer resolved the issue.