Sounds like you're using a 'straight-thru' serial cable and you need a 'null modem' adapter to cross the send and receive lines. I say this because there is no communication at all. The 'busy' message should either show N numbers coming through during transmission or an error message (if the baud rates don't match, for example).
Let me explain in a little more detail:
The RS-232 standard defined devices on either end of a serial cable. One was considered a 'computer' or 'DCE' device. The other end was thought to be a 'terminal' or 'DTE' device. Given this "standard" setup, the wires in the cable itself went straight through - that is pin 2 went to pin 2 and pin 3 to pin 3. (RS-232 cables always send and receive on these two pins.)
When connecting a computer (your laptop) to a DynaPath CNC, both devices are considered to be computer devices. In this case, the send and receive lines must be crossed to get the two devices to talk to one another. (Pin 2 on one end must be wired to pin 3 on the other end and pin 3 must be wired to pin 2.) This is called a null modem or crossover cable.
There are hardware control lines that need to be crossed as well, but I haven't mentioned them until now so as not to complicate things.
Null modem adapters cross all the right signal pairs and don't cost much. I think you can still pick one up at Radio Shack, or get one online at a place like CableWholesale Computer Cables – HDMI Network Cat 5 USB Cable..