Microsoft CRM 3.0 Error when clicking on Reports

We have a MS CRM 3.0 setup and when we go to the Reports section in the CRM interface we get an error message, See Below. Any help on this would be great as I have gone over every Microsoft article I could find to try and figure this out. What our setup looks like is we have a server with CRM installed and a 2nd server with SQL 2005 and Reporting services installed. If I connect to the Reporting services server I can login and look at the reports that I should be able to run from the CRM interface.

Microsoft CRM Unhandled Error Details:
Server Error in '/' Application.

The request failed with HTTP status 401: Unauthorized.
Description: An unhandled exception occurred during the execution of the current web request. Please review the stack trace for more information about the error and where it originated in the code.

Exception Details: System.Net.WebException: The request failed with HTTP status 401: Unauthorized.

Source Error:

An unhandled exception was generated during the execution of the current web request. Information regarding the origin and location of the exception can be identified using the exception stack trace below.  

Stack Trace:

[WebException: The request failed with HTTP status 401: Unauthorized.]
   System.Web.Services.Protocols.SoapHttpClientProtocol.ReadResponse(SoapClientMessage message, WebResponse response, Stream responseStream, Boolean asyncCall) +1296
   System.Web.Services.Protocols.SoapHttpClientProtocol.Invoke(String methodName, Object[] parameters) +218
   Microsoft.Crm.ReportingServices.ReportingService.GetResourceContents(String Resource, String& MimeType) +48
   Microsoft.Crm.Reports.ReportCache.get_CategoryList() +401
   Microsoft.Crm.Reports.Home.ConfigurePage() +918
   Microsoft.Crm.Application.Controls.AppPage.OnPreRender(EventArgs e) +20
   System.Web.UI.Control.PreRenderRecursiveInternal() +62
   System.Web.UI.Page.ProcessRequestMain() +1499

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This looks very much like an authentication problem. My immediate concern is that you say you can login to the report server and see the reports, you should not have to login if it is correctly using integrated authentication, if you are needing to login then CRM will not be able to access the report server and would give the error you are referencing here.
Jesse_SparksAuthor Commented:
Sorry for the confusion I see what you are saying. Integrated Auth is working and I can open each site without needing to enter a login crm = http://crm, and Report server = http://sqlsrv/reports 
Can you confirm that you have looked through the following Microsoft articles : 907487, 921546 and
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Jesse_SparksAuthor Commented:
We fall under Path A in this document and I have done everything that it said. We installed the CRM and SQL server logged in as a domain admin and the CRM App on IIS is using the Network Service identity. Our Domain level is 2000 mixed as well.
Jesse_SparksAuthor Commented:
Okay I have rebooted both servers and now when I go to reports the list of reports does show up. Now the problem is that when I click on a report to run it it asks for the vaules for the report and then on the next screen it askes for a username and password, no matter what I put in that field it will not work.
Have a look at this, it has solved a similar problem for us before :
Jesse_SparksAuthor Commented:
Okay I found an article that talks about Checking the connection string value in the Reporting services setup and I have gone into that area and the connection string for the CRM is blank but I do not know what should be in that box. Please help.
Here is a sample Data Source Screen for CRM

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Jesse_SparksAuthor Commented:
Thank you very much that did it now they work again. Thanks.
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