That last line is a result, not a cause.
Did this device ever work properly?
Can you exchange it for a new one?
(Opening it and adding the serial port has nothing to do with this failure.)
Did you modify the /etc/passwd or /etc/shadow file of the 'main' operating system?
Have you tried running the 'diags' operating system?
- Reboot device
- Hold down a key until the u-boot> prompt appears, release key, press enter
- bootm 0xE41000
With what result/observations?
And if nothing else seems possible - would you be interested in trying to re-install the original factory firmware install?
(We (well, several of us) have a copy of the pre-shipment factory install but no one has ever tried it on a device in the field.)