Since you are using v5.5, there is no out-of-the-box JSON parsing API you could leverage. Either convert JSON to XML and then parse it as you mentioned or leverage a third-party library such as Jackson to write your own parsing logic. Or better still, upgrade to the latest Pega version J
We found the json jar on google, tried to package in prweb and redeployed on Websphere, added the jar file name in class paths, got the contents to the temp folder deleted and got the Server restarted.
But still the java class isn't getting getting picked up. Following was the error (Java 6 version for both PRPC and the installed jar file)