Okay I just want to wrap up this thread because I hate searching for answers and see people with the exact same problem, but frequently we see no solution. I know it's been several months, but here goes:
I contacted Andy via email and we exchanged a few ideas and he was, as always, very helpful and gracious. He finally asked me to send the minipac back because the LED wasn't lighting at all. That's really why I thought it must be defective. So I sent it back, and in abut three or four days I got a minipac in the mail. Now, I'm in the US and Andy's in the UK so I thought that was too quick for turn around. There were no notes in the package but I wondered if mine was returned because I didn't fill out the customs paperwork properly. So I emailed Andy, and it turns out he cross shipped me a new minipac.
So I had my new minipac, plugged it in, wired everything up, and ... chaos. Some buttons worked, others didn't. BUT the minipac LED came on, and I was at least getting some response, so I eliminated the minipac as a reason for my woes. Thanks Andy!!!
I ended up finding a new ps2-ps2 cable to replace my hacked one, and that didn't help. I figured I must have just wired the harness wrong. All wrong, like in the wrong orientation or something. I was so fed up at this point I put the project on hold until inspiration struck.
Well, Saturday I went to CAX (California Extreme - look it up) and that was all the inspiration I needed. On Sunday, I rewired the entire harness, fired her up and SUCCESS. Except I didn't have an old PS2 keyboard, having given all mine away over the years, so I couldn't set the ESC, PAUSE and TAB buttons. So I posted an wanted ad on freecycle and picked one up yesterday about a mile from my house.
Now I have a working machine.
In summary, if the LED on the minipac isn't lighting, it's probably bad. If the LED on the minipac is lighting, you've probably got a bad harness. You can't use a ps2-USB adapter to hook a USB keyboard up to a legacy minipac that only has PS2 inputs. Always keep a PS2 keyboard hanging around the garage in a cabinet somewhere.
Questions?