It's due to the terminal emulation.  Sadly most telnet clients do not support ANSI BBS.  First of all, try mtelnet, you can download it here:
http://ozone.eesc.com/Secondly, I'm not positive but your linux client might work.  Try setting your emulation:
export TERM=ansi
or
export TERM=vt100
That's the command for bash.  I'm having problems connecting, so I can't test it at the moment.