Three potential problem areas occur to me.

The first is an incorrect DNS configuration, suggested by the
'unknown host' messages from ping. If ping cannot convert the
DNS name of the server to a numeric address, the TSM client might
not be able to either.

The second possible issue is that many of the lines you describe
as being in dsm.opt are supposed to be in dsm.sys under Linux or
Unix.

The third possible problem is the 'tcpclientaddress' line. If the
address specified is incorrect, the TSM server may be sending
prompts to an unused address or to a NIC on a different system.
Is there a particular reason this statement is needed? I don't
think we have found it necessary for any of our TSM clients.