The best way to follow up is to get a gateway 255 level trace by setting the following in the gateway init<sid>.ora file -
and run a select from a new SQLPLUS session, then end the session.
The trace will show the SQL being sent through the gateway.
So, for example, if the Oracle select has a 'where' clause it can be checked if the 'where' condition is being sent through the gateway. It can also be checked if any functions are being sent through the gateway instead of the data being pulled back to Oracle for post-processing. Something may have changed in Sybase 12.7 so that Oracle now sends different queries.
It would be even better if you still have a Sybase 12.5 database to compare the traces.
Are you using Dg4Sybase or Dg4ODBC ? Did anything else change or just the Sybase version ?