Abstract: Positron Emission Tomography (PET) provides important metabolic information for tumor detection and staging but remains significantly less accessible than Computed Tomography (CT) due to its high cost, infrastructure requirements, and reliance on injected radioactive tracers. CT-to-PET image translation using generative models aims to address this disparity, yet state-of-the-art diffusion-based methods are limited by the scarcity of paired training data. To overcome this, we propose a domain-adapted latent diffusion framework that transfers natural-image priors using a relatively small dataset of 21,930 paired CT/PET slices, incorporating a signed power transform to resolve extreme intensity sparsity in PET data. Compared to CPDM, a state-ofthe-art baseline for CT-to-PET image translation, our approach yields superior performance in pixel-wise reconstruction and localized tumor fidelity, demonstrating effective transfer of natural-image priors to the medical domain. We further provide a systematic analysis of evaluation metric reliability for sparse PET data, showing that standard full-image metrics can be misleading indicators of translated image quality, and propose background-filtered and mask-restricted metrics as more clinically meaningful alternatives.