I don't really have any advice, except to say "I feel your pain". My
520 came up just fine on the serial port, but my 550 was quite ornery.
I had an actual 3151 cabled to it (with the appropriate IBM-supplied
cable), and the first time I booted of the AIX CD, it started to
respond normally as you'd expect, but kept coming up with some kind of
local printer error, so I configured the terminal for no printer,
rebooted the 550, and got nothing after multiple tries, even though the
LCD panel would eventually show "c31", indicating a successful boot to
CD and waiting for console input. I also tried a PC with
Hypterterminal - same thing (i.e., no response at all).

I was in the middle of hooking up our serial KVM switch, so I tried
THAT, and lo and behold, it worked! It first came up with the ASMI
menu (I had never seen that on the serial port - only via the web
interface), so I selected power on, and it booted to the CD just fine
and the terminal responded, been fine ever since, through several
reboots - I have no idea what the original problem was, or what I did
to fix it.

It sounds like you definitely have your cable and terminal settings
correct (or you wouldn't be getting the ASMI menu) - so don't get
bogged down troubleshooting that - , but beyond that, I have not a
clue. I am interested in hearing the final resolution, though, so keep
us posted.

BTW, you can assign a static IP address to either of the HMC ports
(through the ASMI interface), should you want to put it on your LAN. I
did that just because I could - might come in useful someday. I made
the DNS entry "servername-ASMI" to help me (and others) remember. One
handy feature is the ability to see the LCD codes in real-time when
you're nowhere near the machine. Oh, it also works fine with the
Firfeox browser - no need for Internet Exploder.