To setup the JNI sources, you'll need to do the following:

(1) Go to your NDK root directory

(2) mkdir apps/lossless

(3) Create the file "apps/lossless/Application.mk" containing two lines:

APP_PROJECT_PATH := $(call my-dir)/project
APP_MODULES      := ape flac wav wv mpc lossless

(4) In apps/lossless, make a link called "project" pointing to the unzipped andLess directory (full path!).
    (check that from NDK root you can open the file you're reading now as apps/lossless/project/jni/README)

(5) Change the following line in build-binary.mk (NDK build file):

diff -r android-ndk-1.6_r1.orig/build/core/build-binary.mk android-ndk-1.6_r1/build/core/build-binary.mk
166c166
< $(LOCAL_BUILT_MODULE): PRIVATE_STATIC_LIBRARIES := $(static_libraries)
---
> $(LOCAL_BUILT_MODULE): PRIVATE_WHOLE_STATIC_LIBRARIES := $(static_libraries)

I don't know how to get around this NDK "feature" gracefully, but the app won't link otherwise. 
If you do know, please inform me. 

(6) Now you just go to the ndk root dir and "make APP=lossless" to get "liblossless.so" in its proper place, 
so that it'll get added to the .apk when you build the java code.