Any discussion of this has, unfortunately, gone very quiet. However, while it wasn't me who raised it I continue to poke around, and have come up with a couple of relevant points.

The first is that somebody suggested using MUSIC/SP as a development platform since it has a degree of TCP/IP support (if run on its dedicated Sim/390 emulator, which is Win32-only). In practical terms this isn't strictly necessary, since standard IBM terminal clients (x3270, tn3270) support a file-transfer protocol which is implemented at the mainframe end by a program called IND$FILE.

The second, possibly more interesting, is that while the freely-available "classic" IBM operating systems allow a program to have a 24-bit address space (i.e. an absolute maximum of 16Mb, including kernel entry points etc.), they've been "retrofitted" by enthusiasts with extensions to increase the address space to 31 bits. This is sufficient to allow GCC to run natively, and as such it should be possible to get FPC running on the target system rather than messing around with the compilation on a PC and the assembly/linkage on a mainframe (or, more likely, a mainframe emulated by Hercules).

I've added minimal descriptive text plus a couple of links at http://wiki.lazarus.freepascal.org/Qemu_and_other_emulators#IBM_S.2F370.2C_S.2F390.2C_and_the_S.2F380_.22hack.22 , and will continue to poke around between other work.