Hmmm ... I tried out the serial connection (hadn't do so lately), and saw the same thing you describe. Removed the lock file, rebooted the empeg, and here is what happened:

./emptool --serial /dev/ttyS0
2000 Checking connection [Done]
2121 Downloading
2121 Starting download [Done]
2122 Retrieving tags index [Done]
2123 Retrieving databases [Done]
2124 Retrieving playlists [Done]
/> ls
expand: added /Unattached Items
expand: added /Albums
expand: added /Singles
expand: added /Mixes
expand: added /Humour
expand: added /Setup
2402 Listing total: 6
/Unattached Items
/Albums
/Singles
/Mixes
/Humour
/Setup

Since it didn't work initially, I'm wondering if there isn't something 'wonky' on the empeg side ... hmmm ... I just quit out of emptool, and attempted to restart it, now it just sits there staring at me. Seems like something is going on, just not quite what one would expect.