I deleted all devices and activities, and did a reset to the harmony smart control. 
Then I set everything up again, a couple of times, starting with only the remote buddy activity and no other device, and finally remote buddy responded to button presses. 
I then added the rest of devices, TV, AVR and made a new activity that included the PS3 (imac) device.

This is one of these fixes that I don't have a definite answer as to what exactly was wrong. I drunk a beer while doing it too, if that helps.