I can't help with the BO BI side, but will comment on this from the ASE side.
This message is commonly the result of the client telling an ASE configured to use utf8 that it too is using utf8, but then sending text data that is encoded in a non-utfi8 character set (such as iso_1) and that data contains some characters that are not ASCII characters (i.e. byte values from 128..155).
Less common but still possible is that the client is sending actual utf8-encoded text data but the data contains an invalid byte sequence (i.e. the data is corrupt).
-bret