Ask HN: How to make a living from Open Source Software on Open Source Hardware?

I've been working on a JavaScript interpreter for Microcontrollers called Espruino - it's taken an immense amount of work. Ideally I'd make it Open Source so that people can install it, modify it, and port it to new platforms freely, but if hardware was sold with it preinstalled (so people are profiting from my work) they would have to pay a small royalty.

This seems reasonable to me - but looking at http://opensource.org/docs/osd it seems completely against the spirit of Open Source. I've contacted several well-known Open Hardware suppliers, and the response has been 'looks good - but I'm not using it unless it's Open Source, and if it's Open Source, why would I pay you any kind of royalty when competitors can use it for free?'

Does anyone have suggestions about this? If I try and sell hardware with my Software on, I'll be competing with others who can use my software for free! Do I withold features? That hardly seems like it is in any of my users' best interests.

Or do I just release Espruino with some licence that allows people to access and modify the source - but only noncommercially. This won't be 'Open Source', but it seems to be in the best interests of my users.

Any ideas would be hugely appreciated.