Upgrade to Win XP Service Pak 2 SP2 causes connection failure

I've got an app written with Access XP using a PostgreSQL backend internet
connection (using the latest ODBC driver) that was deployed 2 years ago.
Recently a client upgraded to XP Service Pack 2. After the upgrade she was
unable to connect to the remote database, getting the error:

Unable to connect to remote database File Name=C:\Program Files\Common
Files\ODBC\Data Sources\PostgresCNI.dsn Error message: The file is not a
valid compound file.

I did some research and found people recommending the connection string use
'FileDSN=<dsn file>' instead of 'File name=<dsn file>'

So I changed it from:

Set conn = New ADODB.connection
conn.Open "File Name=C:\Program Files\Common Files\ODBC\Data
Sources\PostgresCNI.dsn"

to

Set conn = New ADODB.connection
conn.Open "FileDSN=C:\Program Files\Common Files\ODBC\Data
Sources\PostgresCNI.dsn"

Now the app gives this error:

This file is located outside your intranet or on an untrusted site.
Microsoft Acess will not open the file due to potential security problems.
To open the file, copy it to your machine or an accessible network location.

We've tried turning off the WinXP firewall entirely, adding the server IP to
trusted internet sites, all to no avail.

Any one else run into this?

--
Randall Perry
sysTame

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