Katello is currently sending unicode to the Owner create which is working correctly since the actual key is part of the POST. When katello sends over url decoded restful paths (e.g. DELETE) candlepin can not find the matching owner key. It appears CP is not decoding the path.
Fixed via an upgrade of RESTEasy. fix is in candlepin, 760776281a8549b048b5262cbc1ab5eae39ba9e9
closing this out, its been done for a while