Inconsistent encoding returned [SOLVED]

[eluser]JulijanAndjelic[/eluser]
Hey guys,

I'm experiencing a really strange issue with the charset returned by mysql query.

I have:
$db['default']['char_set'] = 'utf8';
$db['default']['dbcollat'] = 'utf8';

(also tried variations like UTF8, UTF-8, utf-8 but still no good)

And some data stored in mysql which contains utf8 characters.

Say, the letter "ž" is sometimes returned as "ž" and sometimes "ž" (which is obviously incorrect). I have the charset declaration in my page:
<meta http-equiv="Content-Type" content="text/html; charset=utf-8">

I also tried setting my dbcollat to latin1_swedish_ci to match my db collat but again I've got the wrong result.

Am I doing something wrong or could this be a bug?