Strange that they would need the source code. I would think that it should be easy to figure out what encryption algorithm it uses by looking at the binary if it wasn't blatantly advertised anyway.
They may not need it, but source code will allow them to read it faster and with a higher chance of getting it right.
It will also make it easier to re-run the decryption routine to get the original file/verify a cracking attempt instead of having to reimplement it correctly (possibly without having known-good test vectors to check if they got it right).
I've never done windows (95?) disassembly, but from what little VSC++ I did back in the day, for the sake of speed, I would probably have wanted to see the source code instead of disassembling! Don't know how good at this stuff the NSA was back then.