How do I turn an album cover into a colourwork chart for a yoke?

I've charted a couple of custom yokes from album covers and posters, and the short answer is yes, adjust the cast on and increases to fit the motif, not the other way round. The yoke is the whole point of the jumper so you let the artwork drive the maths.

What I do is swatch the motif first, just a small square in the round on the needles I plan to use, beacuse stranded colourwork changes your gauge and the figures will pull in or pucker depending on how tight you carry the floats. Once I know the true gauge, I work out how many stitches I need at the widest point of the yoke for a comfortable fit, then divide by the width of my repeat. Round that to a whole number of repeats, tweak the motif slightly if the rounding is way off, and that gives you your target stitch count at the bottom of the yoke.

From there it's working backwards. Cast on at the neck, work the collar, and place increases so you hit your target count just before the motif starts. You don't have to spread them evenly or perfectly, most yokes have increase rounds worked every so many rounds and nobody notices if one round has an extra stitch tucked in. The one thing I'd avoid is putting an increase inside the motif itself, it will break the repeat and you'll see it.

On the background colour, don't decide based on what's left in the stash. Work out roughly how many stitches the background accounts for versus the figures, and background ussually wins by a mile in a busy yoke. Buy fresh yarn for the dominant colour with plenty of margin, and if you're worried about dye lots, buy all of it in one go from the same shop. A jumper with one background ball from an old batch and two from a new one will show a line at the yoke even if the lots look identical in the shop. One last tip, photocopy or trace the artwork onto proper stitch grid paper before committing to anything on needles. Proportions that look fine on square paper get noticeably squat once knitted, because stitches are wider than they are tall.

I totally agree about letting the pattern drive the number of stitches. I’ve found that if you want the stylized figures to look crisp and not just blurry blocks of color, you have to be meticulous about the tension across the color changes. Last time I attempted a big graphic design for a jumper, I ended up using a pair of those fine needle tapestry needles just for the color changes to help me pick up the thread cleanly. That made a huge difference in how sharp the figures looked. It really keeps the overall picture from blurring even when the stitch count is high. I usually keep the transition rounds very tight before the actual motif starts to define the border properly.

I was thinking about doing this for a band poster instead of a record, and I get the point about the motif first. But if the central figure is really large and takes up like two-thirds of the yoke, how do I make sure the surrounding border doesn't look weird? I have a theory that if the border is too plain it just makes the art look small. Also, I'm worried that if I have to adjust the repeats, the whole design might look off on the finished garment compared to the original print.