I have an Oracle datasource running in LCDS31 from lcds-samples.  I have my Oracle driver in tomcat/lib not WEB-INF/lib.  I am connecting to an Oracle 10.2 server.  I also am running the odbc14.jarI would start by moving your driver to tomcat/lib.  Try ojdbc5.jar first.  I believe I went back to ojd...

Here are 2 good articles that can get you started on setup of a LCDS/Flex/WTP project and debugging. The first article is titled, "Creating a combined Flex/Java project in Flex Builder w/o LCDS/BlazeDS" by Mihai CORLAN.  Do not be fooled by the title, it does show how to setup the project with Blaze...