I believe that it is best to install the sheetrock first. Reasons:
1.) Less possible damage to installed knotty pine. Sheetrockers and tapers work like a storm, and the tendancy to damage a connected finished surface are likely, even if it is a ceiling.
2.) Knotty Pine may be pre-finished and installed (best way). If sheetrock is installed and sanded after the ceiling, then there will be ALOT of dust all over, and in the grooves. Knotty pine has areas of rough surface, these may require scrubbing to remove the layers of dust.
3.) Generally, in 99% of ceiling installations, a trim-molding, of some kind, is installed around the wood board's perimeter edges. This makes up for any spacing that is left. It is best to leave a small gap for expansion anyways, as the boards are wood, and will expand and contract slightly, as all wood does.
Example: Installing pre-finished T&G Knotty Pine, after the drywall is up and finished.
Nail holes filled, and Trim-molding installed around perimeter: