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The Source Placard is found at the end of Henry Townshend's first visit to the Forest World in Silent Hill 4: The Room. Much like the other placards that are on doors leading to a death scene, this one leads into the room where Henry witnesses Jasper Gein's death. The placard isn't used until about halfway through the game, where Henry places it, along with the other placards, beside an inscription on his laundry room wall to open up a new hole that helps him travel between Walter's Otherworlds.
A possible reason Walter Sullivan decided to murder Jasper with the "Source" theme is because of how much he knew about this ritual and for how much information he gave Henry, making him a source of information. Ironically, Jasper's immolation and death are the source of the fire that destroys the remains of the Wish House Orphanage.