I'm looking into it. Is your hashrate not registering, or is your client not able to submit valid shares because its low?
It's not able to submit because it rarely finds anything at the current diff. With p2pool I used the "login+diff" syntax to get work at lower diff. This doesn't seem to be working on lavapit.
Yes, I'm still looking at how to implement VARDIFF ( a good ways off ) , and also how to drop the default difficulty( emminent ). The login+diff isn't supported in pushpool or stratum (as of now) to the best of my knowledge. This was a major factor in us deciding to keep p2pool up and going.