Excellent news! Thanks for digging down to uncover the source of the problem, and thanks for sharing your discoveries with us.
I know very little about pax-jdbc, but it seems like useful software; it would be nice if it cleanly supported both the Embedded and Client-Server driver configurations of Derby. Perhaps you could forward your findings on to the pax-jdbc community, to see if they think it might be possible to enhance their software? In the meantime, it's great to hear that you have a solution that is working for you. bryan