You might want to fire up the profiler and/or use the StartBlackBoxTrace (first link below) to see what is happening with SQL at the time.
Also, that looks like an issue might be happening with IIS being overloaded. Do you have morning reports running in the Report Server? Does someone else have them scheduled?
Auditing: SQL Servers Built-in Traces
http://technet.microsoft.c
Introducing SQL Server Profiler
http://msdn.microsoft.com/
Using SQL Server Profiler
http://msdn.microsoft.com/
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by: VMontalvaoPosted on 2009-03-26 at 04:29:54ID: 23989120
Weird....
What SQL jobs are running in that period?