$$\begin{array}{rcrcrcl} 2x_1 & - & x_2 & & & = & \lambda x_1\\ 2x_1 & - & x_2 & + & x_3 & = & \lambda x_2\\ -2x_1 & + & 2x_2 & + & x_3 & = & \lambda x_3\end{array}$$
So when $\lambda = 1$ we have
$$\begin{array}{1} \,\,\,\,2x_1 - \,\,x_2 \quad\quad\,\, = x_1\\ \,\,\,\, 2x_1 - \,\,x_2 + x_3 \,= x_2\\ -2x_1 + 2x_2 + x_3 = x_3 \end{array}$$
So then I brought over the right-hand side to the left-handside.
$$\begin{array}{1} \,\,\,\,\,\,x_1 - \,\,x_2 \quad\quad\,\,\,\, = 0\\ \,\,\,\, 2x_1 - 2x_2 + x_3 \,= 0\\ -2x_1 + 2x_2 + \quad\,\,\, = 0 \end{array}$$
So now I reduced it go get the following augmented matrix:
$$\begin{bmatrix} 1 & -1 & 0 & 0 \\ 0 & 0 & 1 & 0 \\ 0 & 0 & 0 & 0 \end{bmatrix}$$
From here I'm stuck because the answer in the back of the book says that
$x_1 = x_2 = -\frac12 s$, $x_3 = s$
I thought it would have been more like:
$x_1 = x_2 = s$, $x_3 = 0$
What am I doing wrong?
Your solution is correct, the books is not.
If you plug in your solution to the original equation, you get
$2s-s=s\\ 2s-s+0=s\\ -2s+2s+0=0$
and all three equations are correct.
On the other hand, if you plug in the book's solution, the first equation becomes
$$2\cdot(-\frac12)s -(-\frac12 s) = s$$ which, already, is clearly not true since it is equivalent to $$\frac32 s = s$$ which is only ever true for $s=0$.