I'm not sure how much help I'll be, but here are a few thoughts.
First, working backward from your assumption that the MIDI port might not be working - if you connect an old-style joystick to the port, and configure your system to not use the port for MIDI, does the joystick work? (Of course, this requires a joystick from the pre-USB era, which you might not have, but I thought I'd ask.)
Second, make certain that you have your MIDI cables to the MT-32 connected correctly. You mentioned that you tested it on another PC and found it working, but it can still be easy to get confused about which cable goes to which port on the MT-32. MIDI-Out cable goes to MIDI-In on the MT-32, and MIDI-In cable goes to MIDI-Out on the MT-32.
Third, when using Windows 3.1, as I recall, configuring the MIDI output is not an intuitive task. Your "set blaster" line in your autoexec is probably easier.
Fourth, I don't know or remember if the blaster variable is case sensitive but I've always seen it expressed this way in all capital letters (adapted from the Apogee FAQ):
SET BLASTER=A220 I5 D1 T3 P330 H5 E620
| | | | | | | | |
| | | | | | | | |_______ AWE 32 Only Parameter
| | | | | | | |__________ "High" DMA Channel
| | | | | | |_______________ MIDI Port
| | | | | |__________________ Type of Card
| | | | |_____________________ DMA Channel
| | | |________________________ Interrupt
| | |_____________________________ Port Address
| |___________________________________ Environment Variable
|________________________________________ DOS Command
Fifth, you're working with some classic hardware there, so you need to make certain that your Interrupt (IRQ) is not in conflict with any other devices on the computer.
Sixth, Microsoft has some helpful information applicable to configuring for either DOS or Windows 3.1, here:
http://support.microsoft.com/kb/124944Seventh, if you determine that the MIDI port on the card is bad, you can probably find another refurbished SB16 on eBay or elsewhere. The only catch is that shipping may cost more than the value of the card.