I am posting my answer because I suspect there might be someone out there for whom the above solutions might not have worked.
So, you are getting a warning,
WARNING: [SetPropertiesRule]{Server/Service/Engine/Host/Context} Setting property 'source' to 'org.eclipse.jst.jee.server: (project name)' did not find a matching property.
Rather than disabling this warning by checking that option in Server configuration (I did try that) I would suggest you do this:
Now if you successfully found that there is a bug in your app, the probable place would be look for a web.xml file which the container uses for loading the app. In my case I had misspelled a name in servlet mapping which made me debug meaninglessly for 3 hours. Your problem might be someplace else.
And another thing, if you have many apps synchronized with the server,there is a possibility some other app's context might be the source of problem. Try debugging one by one.