I dunno, but the z-processors and the POWER processors look a lot different even from a floor plan / die shot perspective. The former also clock much higher. Doesn't smell like microcode to me.

No, Power and Telum processors are very different internally.

No. The microarchitectures have some notable similarities and cross-pollinate each other, but they are distinct.

You may be thinking of IBM i (formerly known as AS/400 and i5), which has a completely abstracted instruction set that on modern systems is internally recompiled to Power.