From the LightSwitch forum, as a reminder for myself, because I have had to fix a similar problem.
“We have identified an issue when packaging an IIS site with "Update existing database" selected. This reproduces when using a connection string which does not have db admin privileges to generate the script. Please try again with this permission and let me know if it continues.”
Erik - LightSwitch QA
“I tried that, and it worked for me. Publish is now successful.
Being new at this, let me tell others like me exactly what I did:
Open SQL Server Management Studio, and connect to the local server, where I have the existing database from having published my package the first time, when publishing the first version of my app.
Go to Security \ Logins
Right click on the user that has admin rights to your database in your live environment.
In the Login Properties Page, go to "Server Roles"
Make sure "sysadmin" is selected.
Now publish your package using this user and this user's password in your connection string.”