The collected works of lunatic

There is no special firmware needed. third party cdroms will work fine. For PA-RISC this is true for all the boxes as long as they have SCSI and the necessary boot proms to boot from SCSI devices. For 68k, I'm sure 9000/400s are fine, but I wouldn't bet on all the ancient 9000/300s.
I think the same block size issue like with Suns and SGIs also applies here.

It is possible to teach SunOS to use DNS, but generally requires some "open heart surgery".
One way is resolve+. The other way is using bind4. Both options include patching the SunOS libc.
If you are running 4.1.4 you might want to install official Sun patches too, because Sun released Y2K for 4.1.4.

dual head isn't a problem as long as you have enough turbo channel slots. I used to have a 3000/900 with six graphics cards from an industrial application. Works just fine. Mixing different types of graphics cards was quiet usual, for example when you had a slow, but 24bit, card for displaying images and a fast, but 8 bit, card for the regular desktop, xterms, etc.
I'm quiet sure OSF/1 works with anything that you could put in a DEC3000. You might need Open3D though.

You can easily install something like a current Debian on the box, but then you won't have graphics.
If you want graphics, you should be clear about what version of the propack you are looking for. The last propack that really supported graphics on the prism was Propack 4. PP4 was to be used with a SLES 9 Linux. The original software was some RHEL and Propack 3. There are a number of service packs for the propacks. You will need to match the exact SP of the PP to the exact release of SLES.

Dennis