Finally got it fixed.
This is what happened. We first install BIP 4.1 SP3 with the Sybase SQL Anywhere as CMS database, after we setup a separate Sybase server we decided to uninstall and re-install BI. After the un-install if you don't delete all the directories/files created by the first install, the install keeps wanting to write to the SQLAnywhere ODBC. So after we deleted all the directories/files we were able to move pass the error.
Lynne