ODBC and Swedish characters

We're having problems inserting/selecting Swedish characters with the 3.0.3 (same issue with 2.0.16 though) version of the driver. It works with version 1.0.6 however.

The ODBC driver is set up with Latin1 as 'Connection Character Set'.

CREATE TABLE `table1` (
`col1` char(50) DEFAULT NULL
) ENGINE=InnoDB DEFAULT CHARSET=latin1

insert into table1 values ('åäöÅÄÖ')

select * from table1 gives:

col1
--------------------------------------------------
2†„"Ž™

We have tried different 'Connection Character Set' settings as well as leaving it empty. CP1257 works ok for Swedish but does not cover other languages that we need to support.

Other MysQL .Net connectors have no issues.

We are migrating from MySQL and the Oracle ODBC driver we have been using before have no issues.