Include "proc printto log='alternate-log-file'; run;" at the end of your stored process to direct the log to an external file. I include the execution time, and user name as part of the file name.
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Not really directly related to your question, but you might want to look into PROC STREAM (with outfile=_webout). You'll save yourself from typing all of those ' PUT""; ' statements.
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It sounds like something might not be registered in the metadata correctly. Can you take a look at this example and make sure it's set up similarly? http://support.sas.com/rnd/itech/doc9/dev_guide/websrvcs/sample.html
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