First thought: Are you certain Iowa Piano supports half pedaling?
Second: Have you used this hardware setup with another DAW app (like ProTools or Cubase)? If so, did they have the same issue?
Third: Try inserting ReaControlMidi before your piano vst. Click the button that says show log. Try using the sustain pedal by itself. You should see something like "CC 0 64 ###" where the ### ranges from 0 - 127. When trying the half pedal, do you see a number in the middle (in the 60s or so)? This will tell you if the keyboard is transmitting those half pedal values.
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