Using Mocha

I have an issue with the Mocha emulator.
I have a connection from my PC to an IP address
on an AS/400. This works as I can FTP to/from
that address. But when I try to connect to it
using Mocha, I get "connection the host has been lost".
Turning on the "show negotiation" feature gets me
this:
HOST: IAC DO NEW-ENVIRON
CLIENT: IAC  WONT NEW-ENVIRON
HOST: IAC DO TN_TERMTYPE
CLIENT: IAC  WILL TN_TERMTYPE
HOST: IAC SB TN_TERMTYPE 01 SE
CLIENT: IAC SB TERMTYPE IS IBM-3179-2  IAC SE
HOST: IAC DO EOR
CLIENT: IAC  WILL EOR
HOST: IAC WILL EOR
CLIENT: IAC  DO EOR
HOST: IAC DO TN_TRANSBIT_BINARY
CLIENT: IAC  WILL TN_TRANSBIT_BINARY
HOST: IAC WILL TN_TRANSBIT_BINARY
CLIENT: IAC  DO TN_TRANSBIT_BINARY
CLIENT: IAC NOP
CLIENT: IAC NOP
CLIENT: IAC NOP

what is going on here?
Have anybody had this type of problem and found a solution to it?
TIA
Leif