Hello, been there done that.
Our environment was the same except OD version 8.4.0.3.
You did not mention about TSM, is it on the same Server as OD or in separate.
Don't know if you already have done something, but option 1 not reasonable.
New setup with mentioned 2008 win and Sql Server 2008 R2 or 2013.
Actually in Sql 2013 the odbc driver did not work from scratch...had to install odbc driver version 10.
And Tsm in separate server, version 6.4 or higher, must be 64-bit environment.
I have exact steps but not reasonable to paste it here.
If you still need more information let me know.
Done this upgrade to 5 environments, one with Sql 2013, and others Od 9.0.0.2 with 2008 R2 and Tsm 6.4