Hi,
Just was suggesting alternative commands to help make it work.
I think this forum thread is closer to what you are trying to do:
You will need to set the Wowza live application to use RTPTransportMode set to udp, as interleaved is the default and VLC cannot provide an interleaved stream.
The stream file in the Wowza Streaming Engine manager should contain the following:
rtsp://192.168.1.121:8554
Daren