Essentially the DDS compiler incorrectly sets a certain bit when a field is defined as VARLEN. When the file is created with DDL, it sets the bit correctly. However IBM doesn't want to fix the DDS compiler because they believe that will "break" things for other users.
What I ended up doing was changing the program that referenced this file to use SQL instead of native I/O. Although I have to admit, while being told LVLCHK(*NO) is a bad idea, aren't I emulating that by using SQL?
Thanks for the feedback on the list. I also talked at length with IBM about this, and they were very helpful (at least informatively, unfortunately not so much with a resolution).
-Kurt
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