An important question for mosquito population dynamics, mosquito-borne pathogen transmission and vector control is how mosquito populations are regulated. Here we develop simple models with heterogeneity in egg laying patterns and in the responses of larval populations to crowding in aquatic habitats. We use the models to evaluate how such heterogeneity affects mosquito population regulation and the effects of larval source management (LSM). We revisit the notion of a carrying capacity and show how heterogeneity changes our understanding of density dependence and the outcome of LSM. Crowding in and productivity of aquatic habitats is highly uneven unless egg-laying distributions are fine-tuned to match the distribution of habitats' carrying capacities. LSM reduces mosquito population density linearly with coverage if adult mosquitoes avoid laying eggs in treated habitats, but quadratically if eggs are laid in treated habitats and the effort is therefore wasted (i.e., treating 50% of habitat reduces mosquito density by approximately 75%). Unsurprisingly, targeting (i.e. treating a subset of the most productive pools) gives much larger reductions for similar coverage, but with poor targeting, increasing coverage could increase adult mosquito population densities if eggs are laid in higher capacity habitats. Our analysis suggests that, in some contexts, LSM models that accounts for heterogeneity in production of adult mosquitoes provide theoretical support for pursuing mosquito-borne disease prevention through strategic and repeated application of modern larvicides.