Are you unbuffering the right file handle? $|=1 affects the currently-selected filehandle. Be sure you're doing this:

select(MUX_OUTPUT); $|=1; select(STDOUT);
print MUX_OUTPUT "this is unbuffered\n";
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Though you will avert this headache by following merlyn's advice and giving Net::Telnet a try. If you prefer more control, use IO::Socket and/or Expect and set up the connection to the MUSH yourself:

my $mush = new IO::SOCKET::INET ("mush.example.com:8080")
   or die "Couldn't connect to MUSH: $@";

print $mush "command\n";
my $response = <$mush>;
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