SUCCESS! I got my Drobo Elite to connect via iSCSI last night. đ
Here's what I did.
Download Lion Server Admin Tools http://support.apple.com/kb/DL1419
(It's not included in the standard Lion Server install)
Launch it and log the Server Admin app (located in HD/Applications/Server/). Go to Services. Turn Firewall On. Click Save.
Click on Firewall in the left hand column with the green dot. Go to the Advanced tab and turn off everything. Click Save. Then click back on your server name (blue globe in the left hand column). Go back to Services and turn off Firewall.
Reboot your Drobo Elite and launch Drobo Dashboard. After a few moments, mine magically appeared! (My Drobo Elite is using its default network settings. And my Mac Network system pref is set to DHCP)
So even though I had Firewall turned off in the System Preferences, there seems to be some blocked ports that are hidden from the user. The Server Admin app exposed those blocks so I could turn them off. I don't know which particular port Drobo needed, and I'm sure unblocking these ports can make your Lion Server less secure. But I have a trusted small workgroup and internet firewall is handled by my WiFi router.