The parameter needs to exist in:
In the JasperSoft Studio definition of the report (JRXML file)
In JasperSoft Repository
In CA PPM Report Definition
The parameter ID needs to match in all three locations, including upper/lower case
When definining the 'lookup' in CA PPM, we can now use the 'source database' as 'datawarehouse'.
Have you looked at OOTB reports like Project Storyboard which uses parameter projectKey_1 which is a multi-select parameter to check your set-up for your custom report?
Are you able to run the report from Advance Reporting including using your challenged Parameter?