JRuby is an actual compiler to JVM bytecode. FastRuby is translating to Java. If anything, FastRuby is the SAME THING as CoffeeScript.
Transcompilation can be relatively simple in the case of CS to JS, or significantly more involved in the case of Ruby to Java. One of the most significant examples of transcompilation is PHP to C++, as in the case of Facebook's HipHop compiler.
FWIW, I'm probably going to just emit JVM bytecode anyway, since it's easier than emitting syntactically correct Java source.
Something is considered source code if it is intended to be written and read primarily by humans. Once upon a time, machine code would have been the same as source code as there were no compilers, and punchcards were punched with opcodes and data directly. Now, nobody in their right mind considers machine language to be source code, and I could only make a very tenuous argument in favor of JVM bytecode being source code.
Compilation is the process of producing something the "machine" understands natively. Traditionally this was the CPU. Your CPU doesn't understand Ruby, but it (probably) understands x86 machine code, along with various extensions. In the case of Java, the machine is no longer the CPU, but an abstraction of it. The machine in this case only understands JVM bytecode, not Java. Same with the CLR which only understands IL, not C#, F#, VB.NET, etc.
If you emit bytecode directly you'd have a compiler not a transcompiler.