Is your Cluster Elements form setup properly? From the system help file:
Clustered System Environment (Remote DSS/BLF)
Remote DSS/BLF functions across an MSDN/DPNSS network or an IP trunking network. To operate across a network, systems must be clustered. The cluster must support RDN Synchronization.
Feature DNs must be programmed in the Cluster Elements form. The Feature DNs must have the same digit length as the system CEID digits. (See Voice Clustering Programming for an overview of cluster programming).
A device or directory number cannot exceed a total of 64 local and remote busy lamp appearances.
It is recommended that no more than four remote systems carry busy lamp representations of the same device. Exceeding this recommended limit may cause BLF performance to deteriorate. The maximum number of systems that can host BLF appearances of the same device is 32.
When a system is initialized in a single or clustered environment, local busy lamps will indicate the initial state of the monitored device. Remote busy lamps are updated upon the first call activity involving their respected monitored device.
In a clustered system environment, busy lamps are not automatically refreshed upon inter-system trunk recovery. See the BLF REFRESH maintenance command for more information.
In a clustered system environment, if a receiving system switches activity, busy lamp indications are not automatically updated as a result of the activity switch. Busy lamp indications are updated upon the next call activity by their respective monitored devices on the broadcasting system(s). If a DSS key is used prior to call activity by its remote monitored device, the device's status is assumed to be idle/no DND and the DSS key acts on this status.
In a 3300 ICP clustered environment, if a resilient device is programmed with DSS/BLF keys, then you must also program the DSS/BLF keys on the devices's secondary controller.