Yen, I have been making lots of D. Melanogaster cultures successfully for a few months now (for my dart frogs). I only just recently made subsidiary cultures for a 32 oz. Hydei culture I bought a week ago. As you know, Hydei culture about twice as long and twice as slow as Melos, so I won't have any actual flies for another two weeks at the least. But, if you're in dire need of flies, I would be happy to make you a Melanogaster culture (since those will be hatching out soonest) and send it your way for free (just reimbursement for shipping) when the flies are ready.
You do need the active dry yeast because that's what the adults eat. The larvae feed on the media. I also find the greatest yields with less amounts of initial adults. Overcrowding will lead to less production.