TransactionIsolation is not being reset when the JDBC connection is returned to the pool. Bug is indicated in the code.
This was also reported in http://jira.jboss.com/jira/browse/JBAS-1123 and marked as closed but the bug is still there.

public void cleanup() throws ResourceException
{
synchronized (handles)
{
for (Iterator i = handles.iterator(); i.hasNext(); )

{ WrappedConnection lc = (WrappedConnection)i.next(); lc.setManagedConnection(null); }

handles.clear();
}
//reset all the properties we know about to defaults.
synchronized (stateLock)
{
jdbcAutoCommit = true;
jdbcReadOnly = readOnly;
if (jdbcTransactionIsolation != transactionIsolation)
{
try

{ con.setTransactionIsolation(jdbcTransactionIsolation); <-- BUG: It should be con.setTransactionIsolation(transactionIsolation); jdbcTransactionIsolation = transactionIsolation; }

catch (SQLException e)

{ mcf.log.warn("Error resetting transaction isolation ", e); }

}
}
}