@Dexter:Weird.

I've updated my OP with the newer source code. When I run it I get these results in console:

Using: TripleDESCryptoServiceProvider
Key: I7Oahhupbb64UE/M+ex7r/JG08GXXIdd
IV: nXDMTEnbbj8=
Encrypt this:
123
Encrypted in 8 bytes as "IrhKcDMCixU="
Decrypted in 0 bytes as " "
----------------
Encrypted in 16 bytes as "IrhKcDMCixXFhW3UMfsnIA=="
Decrypted in 8 bytes as "123 "
----------------
Encrypted in 16 bytes as "IrhKcDMCixXFhW3UMfsnIA=="
Decrypted in 8 bytes as "123 " (8 bytes read)