VB.Net ReportServer application authentication error

.NET - SSRS 2008 R2 - ReportExecution2005.asmx - 401: Unauthorized

I have reconfigured an existing (previously non-operational) SSRS installation and upgraded it to SSRS 2008 R2. It is running on Windows Server 2003 R2 alongside the MSSQL database which is hosting the ReportServer and ReportServerTempDB databases, as well as another database which contains application data to be reported on. The server is called AHTEST.

The SSRS ReportingServiceService.exe is running as the NT Authority\NETWORK SERVICE.

We have a VB.Net ReportServer application which monitors a report request table within the application database, submits report requests to SSRS and handles the returned output.

The configuration has worked to the point that I am able to impersonate the user (which is a local user on the server: AHTEST\HMP_ReportServer) to produce report output via the (interactive) Report Manager (which uses the standard SSRS URL: http://ahtest/Reports) through a browser.

BUT, when I attempt to submit the report requests in code (via http://ahtest/ReportServer/ReportExecution2005.asmx), I receive a “The request failed with HTTP status 401: Unauthorized.” System.Net.WebException.

I have tried everything I can think of in terms of IIS authentication (but could easily have missed something).

And I have tried anything that I could make sense of out of the following articles for SSRS authentication, without any luck either:
•      http://support.microsoft.com/kb/871179
•      http://www.sqldev.org/sql-server-reporting-services/http-401-error-when-calling-reportexecution2005-from-web-service-hosted-on-same-machine-24228.shtml
•      http://msdn.microsoft.com/en-us/library/ms159272(v=SQL.105).aspx
•      http://msdn.microsoft.com/en-us/library/bb522727(v=SQL.105).aspx
•      http://msdn.microsoft.com/en-us/library/ff487479.aspx

Any help would be greatly appreciated.