I was getting the same assembly version error but it turned out my DNN install was not able to access the database server residing on another machine. It had nothing to do with assembly version and the error text is definitely misleading. I did the following to resolve the problem.

1- Installed SQL Server on the same machine where DNN is residing (Though its not a solution, it should work when SQL is on a different machine)

2- Remove all installed files in the DNN folder. Install zip file again and restart IIS.  Set the web.config connectionstring and leave everything else as it is. Instead of typing (local), I typed IP address in the connection string

3- Set necessary directory permissions as recommended in the installation document

4- Delete the database and recreate it in SQL.