No, you have not set JAVA_HOME properly. See this line of the console output:
JAVA: java
If JAVA_HOME were set properly, this would print out:
JAVA: /usr/jdk/instances/jdk1.5.0/bin/java
Are you, by any chance, starting JBossAS as a service or using a different account to run
it? If so, JAVA_HOME is not set properly for that account.
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