DLm: Tape mount message IEF696I I/O TIMEOUT ON DEVICE nnnn - DEVICE MARKED NOT READY

IEF696I I/O TIMEOUT ON DEVICE F226 - DEVICE MARKED NOT READY 

The job may move on to subsequent job steps, or may get hung.  If this message is observed, the tape is left mounted on the DLm VTE tape drive and must be manually unloaded.

This issue is typically observed when the DLm does not honor a tape mount within the device I/O timeout value, which is typically three minutes.   

The condition usually occurs when the DLm or the DLm storage array is busier than normal.  In this state, the DLm may have periodic slow mounts.  The IEF696I condition is typically observed via a job and step requesting a mount of the tape even though actual I/O or data set "open" is not required - Typically an IEFBR14 job step to delete the data set such as with a DISP=(MOD,DELETE). 

If the job is waiting, you may need to 'ready' the device ; from DLm System Manager ; commands ; ready dev=nnnn

If that is not effective, the job may need to be cancelled and resubmitted.  

For deleting a data set on a tape, if you are using JCL similar to:

//JS020    EXEC PGM=IEFBR14
//DD1      DD   DISP=(MOD,DELETE),
//         DSN=YOUR.DATA.SET.NAME,
//         UNIT=VTAPE,SPACE=(TRK,1)

Change that JCL to:
//JS020    EXEC PGM=IEFBR14
//DD1      DD   DISP=(MOD,DELETE),
//         DSN=YOUR.DATA.SET.NAME,
//         UNIT=(VTAPE,,DEFER)

By adding the UNIT=(unitname,,DEFER), the tape won't actually be requested for mounting unless it's needed ; that is, if the data set is actually opened and for a deletion it's not needed.

If the job has already moved past the mount, issue the query mount and detail mount commands from the VTE where the tape drive is provisioned.  The detail mount command will show the date and time of the mount as well as current date / time.  Investigate any suspicious mounts.

If tapes are found to be mounted on the DLm but have no corresponding DLm tape mount, you can alleviate the orphaned tape mount with virtuent / vtd commands

unready dev=nnnn
unload dev=nnnn 

See also: 
How to remove a stuck tape lock on a DLm
and
How to remove a stuck tape mount