I've successfully used your configuration file, changing only the url (database name), and the validationQuery (table name).
How do you identify hsql being accessed?
When the application starts, do you see a .log and .lck files in the database folder? Do they disappear when you stop the application?
If so, please make sure Configuration.xml is in the project root folder.
If all seems in order, you're welcome to export the application and post it here and I'll have a look.
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