1) Don't use autoreconnect

anonymous wrote : 
  | autoReconnect=true
  | 

This breaks transactions. A reconnect looses all the state.

2) Why are you defining a local-tx datasource then handling the transaction 
yourself?
Looks very confused to me. no-tx-datasource perhaps if want to do everything
yourself?

3) "thread" session context is just "broken" if you in an appserver/using 
JTA/CMT/BMT.
It simply doesn't understand transaction demarcation (see the FAQ)
and [url]http://www.hibernate.org/42.html[url]

4) You should also be using "AFTER_STATEMENT" release mode 
http://www.hibernate.org/hib_docs/reference/en/html/transactions.html
since the appserver's connection manager already does the necessary
caching of the connection and also understands when to (not) cache better 
than hibernate when crossing transaction boundaries.

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