In a jquery event handler returning false is the same as calling 
event.preventDefault and event.stopPropagation that's why you don't get the 
Working... anymore, you are stopping web2py.js handlers for submission from 
being processed. Namely this one:

      $(doc).on('submit', 'form', function () {
        var submit_button = $(this).find(web2py.formInputClickSelector);
        web2py.disableElement(submit_button);
      });

Which is what disables the button and puts the Working... there. 

The reason you're having problems is that you're using web2py's ajax 
convenience function which doesn't care about what it's doing, it just 
cares about submitting form inputs. So it never sets the form handlers 
which re-enable the buttons.

One thing you can do is disable the element yourself in your submit handler 
using $.web2py.disableElement

And then have something like:

$(document).on('ajax:complete', '#myForm', function (e) {
        $.web2py.enableFormElements($(this));
      });

-- 
Resources:
- http://web2py.com
- http://web2py.com/book (Documentation)
- http://github.com/web2py/web2py (Source code)
- https://code.google.com/p/web2py/issues/list (Report Issues)
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