The problem is caused by the so called "stealth mode" of Win 2008 firewall. Here is what happens. Converter Server tries to connect to the agent on the source on port 9089. If it gets an error code CONNECTION_REFUSED it means the source machine is alive, the networking is on, but the agent is not installed, so it suggests to deploy it automatically. However when "stealth mode" is on, Win 2008 does not report CONNECTION_REFUSED error, but some other generic networking error (e. g. timeout, or network unreachable), so converter cannot detect the source machine is actually running, and thus it does not suggest to auto-deploy the agent.
The workaround is what POCEH suggested - install agent on the source manually, then when selecting the source, the agent will be listening on 9089 and Converter should be able to proceed further.