It looks like you took some fancy items from agile development, put them to waterfall process and now you call it agile.
The product is developed for a customer who will re-sell it while
paying us royalty.
This is OK.
The team does not get to talk directly to the end user. Only to
the reseller.
This is OK. Product owner talk to reseller and collects requirements.
A product requirements document was created before starting
development.
This is not OK. I haven't seen the project where definite requirement set can be defined upfront. Change your product requirements document to product vision (short) with some initial set of requirements which are subject to change.
The requirements are rigid and do not change.
This is not OK and you will see in the future that it is also not true.
A delivery schedule was agreed on with milestones such as "alpha",
"beta" etc. and features/times attached to those milestones.
This is not OK. The real schedule will be visible from the team progress. You can make general milestones but assigning exact set of features which will be implemented in these milestones is not agile. This can change during development.
All developers on the Scrum team report to the product owner, a
software manager.
This is not OK. I would not say that developers report to product owner. Scrum process keeps visibility of the process but developers do not report anything except regular meetings. It is responsibility of product owner to be in contact with a team and as active participant see the progress himself.
Testers on the team report to a QA manager.
This is not OK. Testers should be part of development team because user story is not done until it is tested (there should be automated test to validate acceptance criteria). There can be separate QA but it is additional level of complex testing and it is usually done on customer side (but doesn't have to be) to validate that SW does what customer expects and the feedback is collected as new backlog items or bugs to existing completed backlog items.
Separating complete QA outside of development team leads to breaking the whole purpose of definition of done. Some QA must be part of the team and that part is not related to any QA manager - that part is doing commitment with development team.
The product owner has directed the team towards certain high risk
technical tasks. The output of those tasks is not usable by the end
user but rather some technology/code that will eventually be used in
the product.
This happens in every project but it should be part of some product backlog item targeting end user. It can be included directly in backlog item implemented in current iteration or it can be included as a spike (proof-of-concept) to clarify complexity of some backlog item which should be implemented in the future.
The product owner has created a backlog based on the requirements.
This is a must.
The product owner is unable to answer some questions regarding the
product. He refers to others or to the documented requirements.
This is not OK. It is job of the product owner to know answers. He has a responsibility and he must do decisions. If he doesn't know answer he must find it asap.
The team goes through the motions of Scrum. Daily Scrum, Sprint
Planning, Retrospective etc. There is a ScrumMaster.
This is OK but it doesn't mean that team is doing Scrum.
Every sprint the product owner and management decide what backlog
items the team works on.
This is definitely not OK. The product owner and management can make priorities but commitment (selection of most prioritized items) is teams responsibility.
There is a burndown chart. Scrum board with stories and tasks. The
estimates on those come from the team.
This is OK.
The team sits in an open floor "bull pen" shared with other teams,
all visible and audible. There is cross-team noise and there is foot
traffic around the team area.
It is Scrum master's responsibility to make end of this if team feels like it reduces their productivity.
The team may be required to attend various meetings not directly
related to the goals of the sprint.
It is OK, the time wasted on these meetings will result in smaller commitment (team will do less real work). It is up to Scrum master / management to reduce these meetings to increase team's velocity.
There are pressures to select certain technical solutions. Some
tools and processes are mandated.
This is partially OK. There can be non-functional requirements for tools and architecture and there can be defined processes but still final implementation is up to the team.
Best Answer
Generally speaking, the person who knows the most about the application requirements or has the responsibility for interfacing with the client is the one who should be the Product Owner.
If the development managers in your organization have the best knowledge of the product's requirements, then they ought to by the Product Owner. Developers need to be able to go to the Product Owner in order to clarify requirements and make sure that what they're developing is actually meeting the requirements.
As far as self-organization is concerned, I don't believe it should have an effect unless the developers report the development managers.
If the developers do report to the individual development managers, then the developer's performance metrics should be adjusted so they are not penalized if they work on other manager's requirements. Likewise, rules need to be put in place so a particular development manager doesn't leverage their employees to gain priority for their product development at the expense of other requirements.
You may consider enhancing the scope of the ScrumMaster in order to make sure that the development managers don't exert undue pressure on the developers in order to change previously agreed upon priorities for the user stories.