SQL Anywhere looks in a number of places in its attempt to find the language resource file - the exact list of places (and order) vary slightly for each version, but the list is basically the following (from the 10.0.1 source):

• same directory as the current module that is looking for it (e.g. dbodbc.dll)
• same directory as the executable (e.g. your application exe)
• the current working directory
• the %SYBASE (environment variable value) directory, if set
• the 'win32' directory beside the directory of the current module
• the 'win32' directory beside the directory of the executable
• the directory specified in the [HKCU|HKLM]\Software\Sybase\SQL Anywhere\10.0\Location registry keys
• the Windows directory
• the Windows system directory
• any directory listed in the %PATH environment variable
• the %ASANY[10] (env var value) directory, if set

The above applies for Windows. There are a few other places that are searched on the Unix platforms.

So in your case, the difference may be the existence of the registry setting? ... But provided that dblgen.dll is in the same directory as the .Net library I would have thought that the first location (same dir as module) would have found it? I.e. your application should not need to set any registry settings in order for it to work.