I have seen symptoms like what you describe when a port was configured with "no exec". You might get these symptoms is the terminal emulator is configured with flow control (I believe the console port does not support flow control). I have also seen symptoms like this when the pinout on the console cable was close but not quite correct. And I have seen symptoms like this when the console port was bad.
I am not sure which (if any) of these might be your situation. My first suggestion would be to try a different console cable. And check the terminal emulator to be sure that it is not configured with flow control activated. If that does not help then you might try doing the password recovery procedure to see if perhaps it is configured with no exec. And if those do not work you might try opening a case with TAC for a possible hardware problem.
HTH
Rick
HTH
Rick