Error while fetching special characters

While fetching some values via a custom adapter, I am facing issues with special characters. The adapter works fine if just deployed (from an already working instance to our development instance), but starts giving issues once compiled (on our development instance). We had a webMethods upgrade since we last compiled. Is this issue due to the wM upgrade from 6.1 to 6.5 ?

We are using UTF-8 / ISI 8859-1 encoding formats.