1) If you don't have AviSynth 2.58 installed yet, install it and try again (although with it actually giving you a warning about DirectShowSource, I assume it is installed).
2) DirectShowSource works by using, obviously, DirectShow's decoding filters. If you don't have Haali's Media Splitter, an H.264* decoder (ffdshow or CoreAVC, take your pick - preferably I'd go with ffdshow, but now that CoreAVC 2.0 is out the
weightp 2 issue shouldn't be a problem anymore), and an MP3, AAC, or AC3 decoder, then it can't do squat. You probably can't play back said MP4 files in Windows Media Player either, because WMP uses DirectShow (maybe Media Player Classic as well, although it has some internal splitters and decoders it uses).
*I'm assuming H.264 simply because of prevalence; it's totally possible to use MPEG-4 ASP (i.e. Xvid) in MP4, and that possibility was around long before H.264 came onto the scene.
So, to answer #2, install
Haali's Media Splitter (not linked to the main site only because it's down right now), and
ffdshow (I go with clsid's generic builds, but feel free to choose a different one if you want), and try again.