FYI, we resolved this issue. The cause was the agent directory /usr/lib/rsc, on the app servers did not have execute access. The bladmin account needs this access to read files in that directory and run nsh commands and nsh.
Our workaround was originally to run the application servers as root (removing the su - bladmin in the init.d scripts). Once this issue was fixed, we were once again to run the app servers as bladmin.