Fix “Your identity is older then this version of Outlook” after SP2 Install

I recently installed Office 2011 on my Mac because even though most Apple stock apps work perfectly fine for me (iPhoto, iMovie, Mail, etc), Pages, Keynote and Numbers are nowhere near the level of Office in terms of features and options. I just can’t do what I need to do using iWork software. And since they haven’t upgraded iWork in over 3 years, it’s pretty obvious that Apple doesn’t care too much about that product.
Anyway, getting back to the point, I installed Service Pack 2 for Office for Mac 2011 and when I attempted to open Microsoft Outlook, I got the following error message:

Please upgrade the Office database.

Ok, no problem buddy. I press the Upgrade button and then I get this message:

There is a problem with the Office database. Rebuild it using the database utility.

Grrrrr. Ok fine, now I press the Rebuild button and what do I get. Well, something pops up and starts performing Step 1 of 5. At this point, I finally get this error message:

Your identity is older than this version of Outlook. Please rebuild by using the last version of Outlook that used this identity.

Just great! I had no idea what this message meant and really don’t care. Microsoft error messages are the most useless statements ever. That’s probably why there are millions of websites dedicated to just explaining Windows error messages. Anyway, in this article, I’ll show you how to fix this problem and hopefully you don’t lose any emails or data in your Outlook file. Regardless of what you do, make sure you do method 1 before doing any of the other methods.

Method 1 – Download Latest Office Update

So the simplest thing to do that can fix your problem is to download the latest updates to Microsoft Office for Mac 2011. Go to this link and download the 14.2.2 update. That’s the latest at the time of this writing. But if you see anything higher like 14.2.3, then download that update instead.
http://www.microsoft.com/en-us/download/search.aspx?q=office%20for%20mac%202011&p=0&r=10&t=&s=availabledate~Descending
If that doesn’t work, then try the next method below. It’s a little more involved, but if you have a ton of email that you don’t want to lose, then it’s worth it.

Method 2 – Outlook Identities

In the steps below, we are basically creating a new Outlook identity and then transferring the data from the old identity that has some problem to the hopefully new working identity. I have tried to attach screenshots to help understand the process.
Step 1: Go ahead and close Outlook
Step 2: Make sure you completed Method 1 and installed the latest update, whatever that may be. For right now, it’s 14.2.2.
Step 3: Go to the Identities folder, which is located in Documents/Microsoft User Data/Office 2011 Identites. Go ahead and make a copy of the entire folder to a different location. In case something goes wrong, you can always copy this folder back to get to where you started.

Step 4: Now go to Applications/Microsoft Office 2011/Office and find the Microsoft Database Utility. Go ahead and create a new identity using the tool.

Step 5: When you go to the identities folder, you’ll now see two identities instead of just one. Inside each identity is a Data Records folder. What you need to do is go ahead and copy all the folders inside the old Data Records folder into the new one, skipping the folders that are already in the new Data Records folder. Those folders that are already in the Data Records folder for the new identity should be something like Database Headers, Recent Addresses, and Preferences. So don’t copy those over from the old Data Records folder.
Step 6: Now go back to the Microsoft Database Utility, choose the new identity and tell it to rebuild the database. This could take a while depending on how big your Data Records folder is.

Step 7: Once it has finished and the database has been rebuilt, now set this new identity as the default one.
Step 8: Exit everything and open Outlook!
Step 9: Pray.

Method 3 – Microsoft KB Article

Microsoft is aware of this issue and has posted a KB article on how to fix it. It’s similar to Method 2, so it Method 1 and 2 haven’t worked, then give this a shot.
http://support.microsoft.com/kb/2702740
Hopefully, one of these methods work. If you get stuck in one of the steps or get some kind of other error message that won’t let you move on