Hi Paul,
the WS-AS7 integration evolved a lot after we initially discussed about this in December.
AFAIU the changes you've been doing basically add your handler to the list (map, actually) that used to create AS7 component descriptors; that ensures things like proper jndi context propagation etc.
What you should still do are the changes I described in my previous posts, ie. modify the WebServicesMetaData (in the handlerchain section) to include your own handler. See https://community.jboss.org/message/641748#641748
We can IRC chat a bit on this tomorrow if you want.