What's In a Name? -- Now Updated For Book 6!

Kappa - A creature Professor Lupin teaches his students about.

From Japanese mythology. Kappas are intelligent water spirits who pull little children into the water and drown them, and attack and fight travelers. They cannot live for long on the land, for they must always keep their heads wet. They have long hair, the body of a tortoise, scaly limbs, and an ape face. The Kappas feed themselves with cucumbers and blood, and use cucumbers to travel on them; these cucumbers fly like dragonflies. (Encyclopedia Mythica)

Karkaroff, Igor - Headmaster of Durmstrang; former death eater

This name was probably in homage from bits from "Frankenstein". Igor is the name of Dr. Frankenstein's assistant, and Boris Karloff (which is similar to "Karkaroff") is the actor who plays the monster.

Karkus - original Gurg of the giants

It's fitting that he would be killed so quickly. His name is a homophone of "carcass," which means "corpse."

Kelpie - shape-changing water demon

In Scottish legend, the Kelpie is a treacherous water devil who lurks in lakes and rivers, usually having the shape of a horse and rejoicing in or causing drownings. When a tired traveler stops by a lake to rest or to have a drink, he would see a horse, apparently peacefully grazing. When he mounts the horse, the Kelpie dives into the water, but besides wet clothes, the rider gets away unharmed. (Encyclopedia Mythica, Dictionary.com)

Kirke, Andrew - Gryffindor Quidditch beater in the mid-90s

Steve Vander Ark points out that Andrew Kirke is the name of the Magician in C.S. Lewis' The Magician's Nephew.

Knarl - a hedgehog-like creature that destroys gardens

"Knarl" would be pronounced the same as "gnarl", which means "to snarl, growl". This probably has to do with its destructive nature.
"Narl" was also the name of an exceptionally creepy demon in the Buffy episode "Same Time, Same Place" (7x03), but I sincerely doubt Jo got her name from that source.

Knightley, Montague - Wizarding Chess chamption

Knights of Walpurgis - Former name of the Death Eaters, according to the Jeremy Paxman interview on the BBC (June 19, 2003).

From the HP Lexicon: This is a play on "Walpurgis Night" -- April 30th, named for Saint Walpurga (whose feast day is the next day, 1 May, and who is the protectress against witchcraft and sorcery). On Walpurgis Night, witches are supposed to meet in the Harz mountains, especially near the highest point. Incidentally, Walpurgis Night stands opposite the calendar from Halloween.

Knockturn Alley - Home to many Dark Arts shops.

Just as Diagon Alley becomes "Diagonally" or "Diagonal Ley" when you put the two words together, Knockturn alley becomes "Knockturnally" or "Nocturnally", which means active at night. A ley line (Nocturnal Ley) is a line connecting ancient sites of Britain and was thought to have magical powers.

Kreacher - the Black family's foul-tempered house elf

Krum, Viktor - Bulgarian seeker and Durmstrang triwizard champion. Close ::cough:: friend to Hermy-own-ninny...

"Viktor" is phonetically the same as "victor", and he defeated Lynch in terms of catching the snitch.
According to A Harry Potter Fansite, "Krumm" is a German adjective used in phrases such as "dont slouch" and "sit up straight", and literally means "crooked" or "bent".