Is this a single CMS or is it clustered? Do you have any firewalls between DS server and CMS server(s)?
Verify that the hostname you are using resolves to the correct IP address (or use IP address in the DS setup - should be a temporary measure as really you should be using hostname or FQDN) - unlikely as you have telnetted to 6400.
If you're really stuck an it's a Windows machine you can temporarily install one of the BI4 client tools and see if that can log in.
I'm guessing that the CMS is part of a supported BI4 or IPS platform.
What do the DS install logs say? Is auditing enabled on the BI4/IPS side - if not enable it to audit login information and check that the BI4/IPS is registering.