Unfortunately, my results are not 100% reproducible. That is, the workaround does not always seem to work.
My OTG adapter is about 6" in length from end to end. It's this guy here: My standard Micro USB cable is probably a good meter (3 feet) or so, it's the one that came with the Nexus 5.
This morning I tried to boot with the OTG adapter in, no dice. I powered the Parallella off, tried the workaround and it did not work. Interestingly enough, I unplugged both USB and HDMI, power-cycled and it worked. I then plugged HDMI and the OTG adapter back in, they both worked (though I had to soft reboot for HDMI to show properly). It seemed to work now.
I am not sure really, though it is quite mind boggling. It seems like a timing issue in the kernel/boot sequence or something like that.