When trying to add a diagram to an SQL Server 2005 db I got the following error:
Database diagram support objects cannot be installed because this database does not have a valid owner.
To continue, first use the Files page of the Database Properties dialog box or the ALTER AUTHORIZATION statement
to set the database owner to a valid login, then add the database diagram support objects.
In SQL Server Management Studio do the following:
Right Click on your database, choose properties
Goto the Options Page
In the Dropdown at right labeled "Compatibility Level" choose "SQL Server 2005(90)"


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