I?m not sure if you are aware of this or not, but there is a fairly active listserv dedicated to Linux for zSeries. You might want to cross-post this question there. Quite a few IBM developers and other prominent members of the Linux for zSeries community post there.
For more information send an email to LISTSERV@VM.MARIST.EDU with the message: INFO LINUX-390 or visit http://www.marist.edu/htbin/wlvindex?LINUX-390.
Regarding the calculation, I?m not doing much with Linux for zSeries, but from what I?ve observed and read it?s counterintuitive (i.e., not one-to-one). Most my Linux guests seem to do well with 128 MB.
I hope this helps. Good luck.