Hi Ruel,
In the older drivers they were "allowing" storage on characters not part of the code page on ASE.
In this case the client (ODBC) is given cp850 as code page and therefore multi-byte chars aren't able to be converted since the newer drivers are more sophisticated in the handling of character data.
You should upgrade the driver to 15.7 SP130. Then add conn property Multibyteasunicode=1 in the connection string used by the application. I don't know offhand if this will absolutely work with cp850 but that is the starting point.
Cheers,
-Paul