I have the user group/k2 user group set up to allow Item editing/adding an item but I do not see the button. How can I fix this?

I had the same problem and discovered that I needed to assign the user to a K2 group with permission to add an item and set the person up as a Joomla user too (e.g. Registered in Joomla and Author in K2). Then after logging in as that user an 'Add new item' link appeared in two places: above the Category description and also below the login panel where four options appear. These are Add new item, my account, my page and moderate comments on my items. Hope this helps.