I'm having the same issue. Seems to be a TCPIP and Proxy interaction
issue.
Using bm37sp1, BMMACSSL1, or B2bm37sp2 and the TCPIP stack from
Netware 6
sp2, all is fine. Upgrade to 6.05o or 6.05p and Transparent Telnet
doesn't
work. I'm opening a ticket with Novell on this now.