Translation:The spokesman did not tell us what the source of the pollution was.
"The spokesman didn't tell us what was the source of the pollution" should be accepted.
But is not the sentence "He did not tell us what was it". incorrect instead of "He did not tell us what it was"? When the question is part of a longer sentence, the word order changes. I have been learning this for this week so I am confused now...
Actually, this is one of those sentences where both word orders work, though I would say that "what the source of the pollution was" may be used more often than "what was the source of the pollution." But it's true that "he did not tell us what was IT" would not work, and your logic was sound. Sometimes, with English, there are exceptions to what are otherwise pretty reliable rules... bet that never happens in Czech, though, right? :-)