Please add some detail about your live source. What do you mean by "AS2"? Also, looking in your log statements, located in [install-dir]/logs, do you see any WARN or ERROR logging reported that appear related to the Transcoder AddOn?
As to a Flash Grabber, in most cases, this is an illegal/unacceptable tool used for converting hosted streams to VOD assets. Wowza will not support this use case functionally or in practice.
Authentication can be configured using Wowza Streaming Engine Manager. More information here:
The Flash browser plugin is still the only thing that comes close to that description and can publish video. It does have to be installed of course, but is usually already installed on most desktops. The recent versions of Flash can publish h.264 video and Speex audio, as shown in that article. All you need is Flash Builder, and the user of your application needs recent version of Flash plugin. Your application can be configured to guide the user to upgrade if necessary.