One thing I have seen that causes the camera to hang, though I didn't notice if it is at STATE 3, is having
BOTH the PWM/TTL connected to the RC
AND the serial cable connected to the PC from the DB-9 on the camera. As I recall from last year, the camera can not run both simultaneously. And, yes, I know this from personal experience. It was definitely one of those "Bill, you doofus" moments.
This is what I observed the camera and servos do when it was hooked up incorrectly. Camera powers on correctly, RC boots normally, servos drive to what appears to be 127 or center position, and absolutely nothing shows up on the terminal window. When sending a "c" or "t" command to the port, a "NAK" will be returned sometimes.
I hope this helps out someone.