What does lsattr /etc/inittab say? Does it have an i in the attributes field (or anything else, for that matter)?
If not, do your su thing again, and then do a whoami. Just as a sanity check...
For init 3, you need to do /sbin/init 3 as root, or do su - instead of normal su (this is so root's profile gets executed, and you get the /sbin directory put into your PATH).