You don't mention any details of the terminal itself.
1) Check the value of $TERM is set, and that it is set to a value which matches you terminal and that the terminal itself is set up correctly.
If the unix "clear" command does not clear the screen, this usually means that the TERM is wrong.
2) Check "stty -a" values.
Clearly "stty intr" is not set to ctrl/C . (It's echoing ctrl/C rather than actioning it).
In your example ctrl/Z has backgrounded the task. This is normal behaviour.
Seems like I found the culprit in /var/adm/messages.
We have some unusual errors there like.
kern.warning] WARNING: [AFT0] 3 soft errors in less than 24:00 (hh:mm) detected from Me
mory Module J0406
Transaction was a block operation.
Jun 25 12:06:07 ussd pcisch: [ID 956438 kern.info] dvma access, Memory safari command, address 00000000.7e2ee2d0, owned_
in not asserted.
secondary error from DVMA read transaction
I googled for these errors, seems like the PCI slot where the memory card is inserted is faulty. An engineer from SUN Microsystems is also working on it.'