As far as I understand the main problem is that you need a way to access the model object before the edit form is displayed. The edit event of the Kendo UI Grid will show the edit form and I guess this is the reason why it does not work for your case. My suggestion would be to use custom command for editing instead of the default edit command. In this case you are able to call the editRow method in order to force displaying the edit popup form. Prior the opening it is possible to access the actual model object (the dropdownlist is bound to the actual model).
The Grid / Custom command demo shows how to access the data item (model associated with the row which contains the custom button) when the custom command button is clicked.