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I've experienced the same problem. Have also tested with jTDS 1.2.7 and 1.3.0
Have anyone found a solution (other than using Java 7u5) ?
It's four months later, but my colleague and I have reproduced the same behavior in both our commercial product, and a very simple example class. It's exactly as you describe it, where the latest versions of both Java 6 and 7 (and several previous versions) hang during the first jTDS SQL query to the DB (immediately after the SSL and handshake). It also happens with the Microsoft JDBC driver.
If you disable the BEAST SSL fix (-Djsse.enableCBCProtection=false), then the connections work without any problems. So, while this is different from the original BEAST SSL problem and subsequent fix, it really seems like some additional changes were made to the fix in a later Java release that broke things.
My colleague has filed a bug with Oracle, and is awaiting a response. We also filed a bug at the jTDS project (#690 - http://sourceforge.net/p/jtds/bugs/690/) that has simple reproduction steps. A contributer at the jTDS project agrees that this seems to be a problem with the JRE, and is not specific to jTDS.
I hope that Oracle will address this issue soon. We need to periodically update the JRE due to vulnerabilities, and we need to have SSL for our JDBC connections for security reasons. This bug puts us and others in a difficult position.
The bug report referenced here seems to identify this as an issue with jsse, possibly a regression introduced in subsequent updates. Is there a bug report in JSSE?
I believe the problem lies with the MS SQL implementation. Would suggest opening a support case with them.
(More information will be posted shortly.)
Edited by: wetmore on May 16, 2013 5:35 PM
We also have the same issue with the latest Java 7 Update 45 release.
If any solution identified please post.
Tried using JTDS 1.3.1 driver with no luck.