Today I ran into the above mentioned problem whilst trying to perform a clean install of ITMS 7.5, so I thought I would share what worked and what didn't.
Windows 2008 SP1 R2 with SQL 2012 SP1.
SQL was initially configured for Windows Authentication. When SIM failed, I manually created the database to no avail.
I then changed to mixed authentication and changed the SA account (as I obviously didn't know what the original one was) via the UI. Unfortuantely, the SA account had the same problem.
What worked was running the following query:
ALTER LOGIN [sa] WITH PASSWORD=N'NewSAPassword', CHECK_POLICY = OFF
ALTER LOGIN [sa] ENABLE
This allowed SIM to create the database and begin the installation phase. Once ITMS 7.5 was installed, and the 9 hotfixes (required a rebot beforehand), I opened the Database Settings page and switched to the AppId so that...