Have a look at the workflow transition to "close" an issue and look under post-functions. The last one should be: "Event XXX will be triggered". That event has to be used in your notification scheme.
Cheers
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Are people getting other notifications you expect them to?
What exactly have you done to "set up notifications to be sent out when issue is closed"?
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I have assigned a notification scheme to my project and it has all watchers, reporter and assignee as being notified when a ticket is resolved and done. Is there another workflow step I need to add?
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Are people getting other notifications you expect them to?
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