Run localdb under a service running as "NT AUTHORITY\LOCAL SERVICE"

Our product scales from a low end installation running Sql Express to a multi-box solution, running the data center version of Sql Server. Our problem is that on the low-end we install our solution on the customer’s hardware and those customers don't want to have Sql Server installed on their machines.
When we heard about localdb we thought, no problem, we will use localdb for our low end customers. This has, however; turned out to be anything but easy to do.
Here are the steps we have to take to get localdb to run under a service running as "NT AUTHORITY\LOCAL SERVICE"
1) Use psexec (from sysinternals) to create a localdb instance.
2) Use psexec to start the newly created instance
3) Use psexec to add sysadmin permissions to the admin user running the installer
4) Run the database create and update scripts as the install user
5) Also I believe I need to have my c# windows service force the User Profile to be loa ...