This might explain some of it:
viewtopic.php?f=47&t=111484But other points:
DirectShowSource only works if you've installed the proper DirectShow-based codecs (read: LAV Filters or ffdshow-tryouts) and from what I understand, on Windows 7 you also need to use the PreferredFilterTweaker to make DirectShow filters work at all.
You shouldn't be using DirectShowSource. Use FFMS2 or LSMASHSource instead, or for MPEG-1/2, DGIndex/DGDecode.dll & MPEG2Source.
It would appear that VLC just simply refuses to play AviSynth scripts. It looks like VLC (at least, the official build) provides no access to libavformat, which is the most likely way it would probably include support for AviSynth scripts, short of writing their own demuxer (which would be pointless). So it looks like as far as VLC goes, you wouldn't be able to play them anyway. It's weird that there seems to be no hook into libavformat, but maybe it's under the hood somewhere and the actual problem is that the official builds just didn't use a build of libavformat that had AviSynth support enabled.
If you want something *other* than Windows Media Player or MPC-Homecinema that can definitely play them, use
mpv (builds
here), although it requires a little bit of command line knowledge. Make sure to get the 32-bit build, because you're using 32-bit AviSynth.