When working with a Sybase source, the following error was observed:

Bad TDS response stream received from server. Unexpected end of reponse during login negotiation.
The cause of this error is a Sybase installation problem. Normally that installation sets up global environment variables including the following one:

SYBASE=C:\Sybase
When that variable is not defined (for whatever reason), the Sybase ODBC driver fails to load %SYBASE%/charsets/unicode/cp850.uct (or similar) and issues this error.

Make sure that the SYBASE environment variable at the system level is properly set.