Datalist does not store values ​​on postback

I have a datalist control that does not retain values ​​during postbacks when the control causing the postback is outside of the update pane that the Datalist is in. I have verified that the viewstate is enabled for this usercontrol as well as all of its parent controls.

My main situation is that I have a Datalist that contains a custom control on a page. When the user selects multiple rows in the grid and clicks a button, a fillable datatable is created on the server and a Datalist is assigned, which has its item template set to UserControl. In ItemDataBound, I set certain properties on a control that customize the messages of that control for a specific item. Then the AJAX Control Toolkit Modal Popup [Extender. When the user clicks Save, the entire page is returned. The data is collected from user controls and saved to the DB and the popup disappears. The problem I am currently running into isthat there are 0 items in the DataList when the save button is pressed instead of the corresponding number. This issue only appeared after upgrading from .NET 2.0 to .NET 3.5.

Any ideas what might be causing this?