Can't seem to figure out how to initialized my mailbox. When entering feature 986 and I enter the password, the system says locked...the manual has a section for "Telephone Administration Lock" and refers to the administration programming but there is no details about this in the administration section...

I think you mean 981, any how depending on how new this vmail is, the password expiry may be enacted, and if you did not change when prompted then you were locked out. Now you must enter into admin mode f983 and reset password for mail box. If this is a new box then the default password should be 000.
~gluk

All Voicemail admin is done through Feature 983 if you don't have the right password I can tell you how to reset the password.
Once your in goto mbox etc.
A Feature 986 is Transfer to Mailbox and has nothing to do with setting them up.
The basic Features for Norstar Vm are
F980 - Leave a Message to another users VM
F981 - Open a Mailbox
F982 - Operator - sets Operator avail. bus. open etc.
F983 - Admin
F986 - Transfer to Mailbox

Let us know if this helps or you have further questions.