Your code looks pretty good. “Item”, also, is set correctly. Are you setting this capability in TWAIN state == 4 ???
I suppose you get rc > 0 after calling the DSM entry point.
Have you checked the TWAIN status using this triplet: DG_CONTROL, DAT_STATUS, MSG_GET ? Which is the status that you get ?
(Currently I am receiving several TWCC_BADVALUE, but just when I try to set a TW_FIX32 capability.)