We investigate the ionization state of the damped Lya system at z=2.62 toward GB1759+7539 through an analysis of ionic ratios sensitive to photoionization: ArI/SII, FeIII/FeII, NII/NI, AlIII/AlII. Approximately half of the metals arise in a mostly neutral velocity component with HI/H > 0.9, based on FeIII/FeII < 0.013. In contrast, the remaining half exhibits FeIII/FeII~0.3 indicative of a partially ionized medium with HI/H~0.5. These conclusions are supported by the observed NII/NI, AlIII/AlII, and ArI/SII ratios. We assess ionization corrections for the observed column densities through photoionization models derived from the CLOUDY software package. In the neutral gas, the ionization corrections are negligible except for ArI. However for the partially ionized gas, element abundance ratios differ from the ionic ratios by 0.1-0.3 dex for (SiII, SII, NiII, AlII)/FeII ratios and more for (NI, ArI)/FeII. Independent of the shape of the photoionizing spectrum and assumptions on the number of ionization phases, these ionization corrections have minimal impact (<0.1dex) on the total metallicity inferred for this damped Lya system. Measurements on the relative elemental abundances of the partially ionized gas, however, have a greater than ~0.15 dex uncertainty which hides the effects of nucleosynthesis and dust depletion. We caution the reader that this damped system is unusual for a number of reasons (e.g. a very low ArI/SII ratio) and we believe its ionization properties are special but not unique. Nevertheless, it clearly shows the value of examining photoionization diagnostics like FeIII/FeII in a larger sample of systems.