I had the same problem. After 3 days of searching the solution I found out that the answer was very simple... I just connected a webcam to my computer and it worked.
If you say that your Red5 server works fine than you don't need to do extra configuration.
But if you still have this problem, check jour red5.properties file on your Red5 server. You can usually find this file in /usr/share/red5/conf. Replace all the 0.0.0.0 IP addresses in the <something>.host variables with your server IP address (eg.: 192.168.1.2; but not localhost or 127.0.0.1).
You also need to check your Moodle Language lab - OWLL configuration. You can find it in Site administration -> Plugins -> Activity modules -> Language lab - OWLL. I filled the "Path to your Red5 server" and "Server address to access to the adapter" without any port numbers (in my example: 192.168.1.2).