Reproduced. Strange issue, I'm looking into it.
(edit). It was introduced in the feb 19th build, where an issue was fixed with a memory leak with re-using the same page over and over again. This seems unrelated but when testing the fix I ran into an issue where after a fetch, the datasource control didn't flag itself as changed in all cases, so you could have the situation where you had a grid and a formview bound to the same datasourcecontrol and when editing a row in the formview, the grid wasn't updated properly (data was added but the indexes inside the grid weren't).
I solved that by raising the changed event from the datasourcecontrol. After all, it did fetch data.
This however makes the 2 combobox stuff go into an infinite loop, as the fetch of the first triggers the re-check of the select parameters apparently by ASP.NET so the second combobox gets a new call to its select method and again filters, which apparently seems to trigger the first one again to filter.
So, long story short: I have to re-fix that issue where indexes weren't updated properly with the grid + formview setup as raising the event again isn't an option.
(edit). Ok, it's slightly different, but still causing the issue: the filtered combobox dives into an infinite loop because it gets a new trigger that it's changed, so the filter is REapplied, and whopla... it does a refetch on the same page.
I found the cause and compared with the objectdatasource code, I raised the events at the wrong spots (great documentation Microsoft has on how to create a datasourcecontrol with any real features: use a decompiler)... testing
(edit). Ok fixed it!
It's in build: 2.0.07.0317
I'll upload that build later today.
(edit) I've attached the new build to this post so you can continue with your work.