Here is one possible way to get this done...you seem to have done most of this already.
Create one data source using custom SQL to get the list values (I assume from above this is called TARGET_NAME). Create a parameter with allowable values from "List". Use the "Add from Field" functionality to populate the list using TARGET_NAME from this first data source.
Create a second data source using custom SQL that refers to the parameter in the SQL code to limit the selection. This should work well however the one drawback would be if the values TARGET_NAME list change often. You would need to flush-and-refill your parameter occasionally to keep it up to date -- it will not update on its own.
I hope that helps!
That is perfect. You have made my day!
Thanks very much,
Glad it worked!!!