I'm not sure that I'm following myself.
It seems like you created a sql server authenticated account, and it could access the linked server and select data back from DB2. But the windows authenticated account, with sysadmin rights on sql server, could not access the linked server and select data back from DB2. The linked server should be passing the same creditials over to DB2 in both cases, so why is the security chain breaking for the windows authenticated account but not for the sql server authenticated account. Maybe it is breaking out at the windows os, and the sql server authenticated account is using the service account at that time, but the window authenticated account is using itself and it doesn't have enough privs at the windows level (as opposed to the sql server level which has sysadmin). Is there anything in the even logs that help point to the error?
Still trying to understand why the sql server authenticated worked and the windows authenticated did not. I've been pushing windows authentication pretty hard at my current sight and want to understand so if a gotcha comes around I'm prepared for it. I think this is an interesting scenario as well.;)
Thanks for your patience,
MCP, MCTS Sql Server 2005,MCTS Sql Server 2008, OCP