Is it possible to virtualize z/OS, as a guest OS on top of a hypervisor running on an x86 server architecture? Perhaps, running the virtual instance using system Z. Please advise. I do greatly appreciate your feedback.
z/OS can run as a guest OS on top of z/VM, but I don't know that the combination can be run on an x86 architecture. It is probably possible to do so, if you work for an IBM Partner company and get a PC with z/OS installed -- although don't quote me on that! Since IBM places extremely tight restrictions and controls on z/OS and does not allow, in general, x86 machines to use z/OS (except internally and Partner companies), you would be breaking contracts and the law if you were to attempt such without authorization from IBM.
Hercules emulates CPU instructions and I/O devices only, so you have to provide the OS. Technically, you CAN run z/OS on it... but don't get caught. IBM does not license z/OS to run on anything other than their own hardware.
Also, this doesn't quite run it as a guest OS. In this case, you'd be running it on top of an existing OS, and you'd have a number of options to choose from.