xserve 3,1 resolution reset to high black screen

I'm not sure what's happening with your system from the details that have been provided. If you've got dead video output or a black display and have tried power-cycling, resetting NVRAM and SMC and the rest as described, then I'd next try a Safe Mode boot or a boot from DVD and see if that works. Plug in directly, power cycle, and try again. If that doesn't work, then your graphics controller might have failed. I've had a graphics controller failure happen on Xserve, and a controller replacement resolved it. The particular symptoms you're reporting were not seen, but controllers can and do fail in different ways. I'm here assuming this configuration once worked, and is not now working.

If you have a problem with the resolution getting changed when the system is power-cycled, that's been a bit of longstanding "fun" with Xserve and the default refresh and display settings depend on what the video display or KVM "tells" the Xserve about the display settings. If there's no display present, the settings get defaulted to pretty small IIRC. Other settings are based on what the display or KVM (or a faulty cable) is reporting to the Xserve graphics controller.

Depending on exactly what is going on here, there are discussions of the wiring for a video dongle around, and that device has been handy for folks that don't use the hardware display, but rather use Screen Sharing or ARD to access the system remotely. Whether or not that'll work with a flaky or dead graphics controller, I don't know.

Replacing the graphics controller — if that's what has arisen here — is well-documented in the Xserve D.I.Y. documentation that Apple published a while back. Probably the biggest issue will be sourcing a working replacement controller for what is a fairly old system.

Apple is deprecating most of the features of Server.app, so yes, you may also be headed for a server migration.