Selectivly forward or drop source for IP Forwarding Virtual Server

Have you added any logging statements to find out what's going on in your iRule. That's the first thing you should do because without some sort of message flow tracing, there isn't much we can do here.

On thing that I can see is that you shouldn't need to use the "forward" command. Try this rule out and see what's showing up in the logs.

when CLIENT_ACCEPTED {
  log local0. "checking for address [IP::client_addr] in dg_source list"
  if {[matchclass [IP::client_addr] equals $::dg_source]} {
    log local0. "address [IP::client_addr] is being allowed through"
    forward
  } else {
    log local0. "address [IP::client_addr] not valid, dropping connection"
    drop
  }
}

Then try it without the "forward" command and see if that works.

-Joe