...I have the same problem, and I think I tried everything that was suggested: the same app works with no problems on Linux, but not on OS X: and yesterday I tried DBVisualizer and connected using the same driver to the same database and there the ��� umlauts work, but not in Cocoon...
The next step (if you didn't do it yet) would be to debug what's happening at the Cocoon level, using for example the LogTransformer to find out exactly where the encoding starts being wrong, and next look at the java level, by debugging the Cocoon components (using a debugger or log messages, or adding such messages where needed).
-Bertrand
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