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Is it possible you have Snapshot isolation enabled?
These factors could be involved:
"Only one of the isolation level options can be set at a time, and it remains set for that connection until it is explicitly changed."
"With one exception, you can switch from one isolation level to another at any time during a transaction."
"When you change a transaction from one isolation level to another, resources that are read after the change are protected according to the rules of the new level. "
"If you issue SET TRANSACTION ISOLATION LEVEL in a stored procedure or trigger, when the object returns control the isolation level is reset to the level in effect when the object was invoked."
I encountered this not long ago when trying to debug some deadlocks. SQL Profiler ONLY logs the default isolation level of a connection when it is established (the Logon event occurs). It will NOT correctly log isolation levels of a transaction that started after the connection was opened. Most connections default to read committed, so that’s why you are seeing that. Setting a new isolation level in a transaction after the Logon event occurs will not be logged correctly.
Here are some resources:
They are straight from the docs…for example: http://msdn.microsoft.com/en-us/library/ms173763.aspx
(Of course anyone can Google the phrases to see the various documents they appear int…..)