Install Lion on a headless Xserve machine

Question

Dear all,
I'm writing here as I'd need some help on how to install Lion on a headless Xserve.
The Xserve has a static IP address, a DNS name and it is able to connect to the Internet. In order to install the OS on it I booted the machine from a self-made Lion DVD (connecting a keyboard and keeping the 'c' key pressed during the boot) and took remote control over it through another computer - on the same subnetwork - running ARD. So far, so good. The server can be pinged, ssh-ed, and the remote control via ARD works fine (blank username and the server serial number as password). I managed to erase the HD (which, of course, was previously backed up) and to launch the Lion installation. The installation seemed to go alright, until, at the end of it, ARD disconnected (I guess that happened because the installer forces a reboot at that stage). From that point onwards I'm not able to do anything else on the server. The machine can still be pinged, but no ports appear to be open. I can't therefore SSH the server and I can't access it through ARD or any alternative VNC client.
I've repeated the entire procedure twice, ending up with the very same results. My feeling is that the installation is waiting for some input by me (maybe it is stuck at the "select language/keyboard layout" stage?), but I don't know how to provide it. Of course I may be wrong and the problem being something completely different.
Please consider that the target machine doesn't have any graphics card installed at all, thus the option of connecting a monitor to it has to be excluded.
Would be absolutely lovely if someone could give me a hint!
Cheers,
Fabio

Answer 1

Linc,
resurrecting this thread, as I'm having an absolute heck of a time for days, trying to get my early 2009 xserve back online with a clean install of ML.  This thread was enormously helpful, but my problem is just slightly different.  My ML install finished but I cannot see it because I have no video card. But my problem is that I cannot get to the XServe via SSH, Screen Sharing, nothing.  The box acquired a DHCP IP on eth0 just fine, and I can ping it from anywhere on my network, but the SSH service and VNC, etc. are NOT running, so I cannot connect anyway.  I have a perfect install of ML sitting there, I just can't reach the box to do anything to it!  I do have LOM addres on Port1 and it responds to ping also, but I cannot manage it through that IP, right?  I am thinking I may have to use the serial port to get on the CLI and restart some things.  BTW, the obvious idea is to boot back into Target Mode, and mount the firewire from another mac.  No problem, that's actually how I got this far.  But the problem is that when I launch like System Pref's, Network, from the host computer, it is showing me the host computer's network info, not the mounted Firewire xServe's settings.  Is there some raw file I could manipulate on the drive (xServe boot drive), that would affect the assignment of a static IP, or better yet, just start up the SSH service so I can log in.  I've tried changing System Pref's, Sharing, but it obviously didn't take, as SSH is not actually running on the box right now. 
Thoughts kind sir?