Gah!
Don't think they aren't releasing the source because it's being used for a 3D version.
The 'newer' Worms games are perhaps a 90% rewrite of the source.
Worms 3D is a complete rewrite as well.
Real reason - marketing, Team17 still need to protect the Worms copyright and design, if they open-source it anything could happen to the engine. Also there are ports of Worms Armaggedon etc. for the Gameboy (Advance?) and a GP32 port could be seen as competing with it.
However it would not be hard to port an open-source equivalent of Worms, or code a clone from scratch... Worms is a simple game, really, it was cutting-edge then but an experienced group of coders could make it very quickly.
- Rico