Try adding this to the bottom of your connection file:
mysql_set_charset('utf8',$PowerCMSConnection);
It looks like you aren't setting the charset in the database connection itself.. that might be causing the disconnect.
For some reason I was having a hard time debugging with the information you gave me... When I ftp changes the pages weren't changing and when I updated the database it appeared to be pointing to another database... I'm not sure what was going on but it was like I had connection information for different sites.