It can be done and is often done in AIR applicatons.  See a demo application here or a list of articles here ..

You should find the META-INF/MANIFEST.MF at user_projects\domains\lcds\applications\lcds\META-INF.  That will vary with your domain and application names.

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...

Oracle Appserver is not a supported platform. So, I have no experience with it. Does your model deploy to the server? If not, you will need to configure and deploy the RDS servlets similar to what is done with tomcat. If your application is running and connecting to Oracle dbms, it would seem you J...

You need to uncomment the RDS section in the web.xml file of your webapp.  It is commented out initially for security reasons - RDS should not be enabled in a production environment. Also you probably want to set useAppserverSecurity to false as below.    <!-- Add RDS servlets -->    <servlet>      ...

See http://forums.adobe.com/thread/455187.  Many cases are caused by copy of old WAR or old projects pointing to earlier lcds3 builds.