Hey Glen -
I'm not at all sure why you're getting these errors, as I've followed this upgrade path just this week; but with a difference, I upgraded a client SL Mac (not server).
I'm going to suggest this - and you may even be able to do it at your local apple store with a Genius present. 🙂
Find another Lion machine and log into the app store on the account that bought Lion. Find Lion and click the download button. It'll tell you that you purchased before and you won't be charged again - let it roll. The download will proceed and when finished, will start the installer. At that point quit the installer.
Do the same with Lion Server; download again at it's App Store page.
Come prepared with a nice fat USB Stick. Copy both Installers onto the stick. They'll be in the Applications folder on this Mac.
Go to your SL Server, which MUST be at least 10.6.8.
Copy both files to the Applications folder. If there's an old Lion installer in there, overwrite it; you just got the latest build that way.
After copying to Applications, the Server installer will be greyed out and have a disable icon across it. That's normal; it can't run on anything less than 10.7. It just needs to sit there right now.
Run the Lion installer - client, that is.
It'll restart at some point - and then, because you have copied the server installer to Applications already, it will see that you want it to be a Server upgrade and will start quizzing you a bit about your setup and roll over your existing settings where it sees them.
When it's done you'll see your familiar login screen. And yes, it's server! Even though About This Mac says its 10.7.4- it really is Server. Start the Server App (not Server Admin app) and you'll see the new interface.
Server tools for Lion is a seperate download, so trash any SL versions at this point. You can DL the new ones anytime if you have a hankering for fine tweaking, but you're pretty good right out of the gate with just Server app.
Hope this helps. I've basically quoted a lesson from the Lynda.com Lion Server tutorial. 🙂 Just a satisfied customer.
Tony