The request_source is purely for displaying the text 'Return to {request_source}' when you close Author. An organisation will get created on the fly using course name parameters once you start using the integration.
Are there any exceptions (errors) in your lams log file? /path/to/jboss-4.0.2/server/default/log/server.log
Your /path/to/jboss-4.0.2/server/default/log/localhost_access.2009-07-14.log file should have a line containing 'VerificationService' at the end once you've clicked 'Validate'. If it doesn't, LAMS isn't receiving the call.
If you turn Moodle's debugging level to full, you may be able to see some extra messages. In the admin menu, go to Server->Debugging.
Posted by Jun-Dir Liew