Well, I guess I'll answer my own question on this one...
The value in the AS400 was actually incorrect. SQL2000 seemed to be more "forgiving" and allowing this to come in as a value, but SQL2K5 seems to be a little more tight on data structure. Now, that still does not explain a whole bunch but at least it is now working. I do have to mention that the migration of objects and data to 2K5 is not as easy as I thought it was going to be.