while initiating a telnet connection to this server from a remote workstation or server, watch the syslog (provided your indet is running with -l option) with tail -f. What do you see ? Any connection refusal messages getting logged in the syslog ?
if yes, you have a way of ip filtering and it is filtering out anything and everything but localhost. If not, your assumption of "no firewalls in sight" is not holding water as someone ahead of you is blocking the requests.
Step by step:
inetd -k
inetd -l
tail -f /var/adm/syslog/syslog.log
(at this point initiate a telnet connection from a remote point)
show us what you see on the tail output.
________________________________
UNIX because I majored in cryptology...