It seems as though you are trying to create a single page for authentication, and what I would assume is several other pages/services based on the user credentials. And you want this page to bypass the webMethods login prompt.
I didn’t check your authentication service, but will assume that it performs the IS authentication correctly.
Set the index page AND the authentication service as Anonymous to allow the page and the service to be executed by anyone. If a status of failed is returned, have the dsp return the results back to the index page. If the status is success, the user will be authenticated to future services/pages.
I will try this out tomorrow also…