All reports are designed in SQL Server reporting services. Whenever trying to access Report Builder option from report manager, they are getting "Can not retrieve the application. Authentication error

Environment

We are using .NET Framework 2.0. We setup our web application in another domain. All reports are designed in Microsoft SQL Server reporting services and uploaded to report manager. We have given the link to Report manger from our application.

Issue
Whenever users trying to access Report Builder option from report manager, they are getting "Can not retrieve the application. Authentication error".

Trails made to resolve above issue
Trail 1
From the msdn we come to know the error is due to not setting the Anonymous user privilege
for the Report Builder folder in SQL Server Report services.
The URL reference:
<http://msdn2.microsoft.com/en-us/library/ms365173.aspx>
"By default, the ReportBuilder folder inherits the Integrated Windows authentication setting from the parent ReportServer folder. This default setting will not work if the client and server computer are in different domains (or if the client is authenticating the user locally). Users will get HTTP 401 access denied errors and ClickOnce authentication errors such as "Cannot retrieve application" rather than the connection they expect."
We enable Anonymous user access to the report builder folder in SQL Server Reporting services.

Trail 2
Given all we have been talking about was supporting proxy authentication
with default domain credentials, we would only be able to address this case
but not arbitrary credentials for proxy.
A tested, supported workaround is to set useDefaultCredentials to true as
the followings in the machine.config (see relevant documentation for more
details)
Reference URL:
<https://connect.microsoft.com/feedback/viewfeedback.aspx?FeedbackID=115468&wa=wsignin1.0&siteid=210>
A tested, supported workaround is to set useDefaultCredentials to true as the followings in the machine.config (see relevant documentation for more details)
<defaultProxy enabled="true" useDefaultCredentials="true">
We have tried above two work-around. Still its not resolved. Kindly give me solution how to resolve above issue
pvinesAsked:
Who is Participating?
 
HillwaaaCommented:
Hi pvines,

I think that you were on the right track using Trail 1.  Except where you said "We enable Anonymous user access to the report builder folder in SQL Server Reporting services" what the msdn link supplied says that you need to do is turn on anonymous access in IIS:

(from the article)
To enable Anonymous access, do the following:

   1. In Internet Manager, expand Web Sites, navigate to and then expand the ReportServer virtual directory.
   2. Right-click Report Builder, and then select Properties.
   3. On the Directory Security tab, in Authentication and access control, click Edit.
   4. Click Enable anonymous access, and then click OK.

Try that, and let us know how you go.

Cheers,
Hillwaaa
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