Googled my fingers off trying to resolve this.  Looking for any help.

Installing Sage 300 ERP 2012 and Pervasive PSQL v11.2 on a local computer. (no server is being used for Sage or data)  Running on Windows 7.

Pervasive database setup goes ok. (32bit DSN engine creation box was checked, so I skipped ODBC Data source config for now)

Started Sage 300 Database setup, tried to create New, pointed to my created system db, Sage found my Data Source, say OK and get the error 98 message. 

- checked the ODBC Data Source Administrator - looked ok to me (name and path to folder)

- DDF files get created in the folders

- directory permissions (Pervasive, Sage and data location looked ok) (modify or full)

- Pervasive license type = permanent, Sage licenses all activated

Thanks, Scott