I meet the same problem as yours.
but I was on MSSQL server 7.0,
freetds v0.51 , and php 4.0.5.
I blew up the problem by setting the version of tds into 7.0 as below :
...
putenv("SYBASE=/usr/local/freetds");
putenv("TDSVER=70");
...
(I also changed MSSQL 4k-text-limit settings)
Good Luck,
Kim