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SSRS Deployed Reports Throws Not Supported in Edition of Reporting Services

Hi Experts,

I have a report that until recently used one SQL database to populate.  Business requirements are forcing me to split the database up.  When I deploy the report it fails and I get the following error.  Both databases are housed on the same server.  
I checked the documentation and found that "Remote data sources are not supported. Reports that are hosted in a SQL Server Express report server must retrieve SQL Server relational data from a local SQL Server Express Database Engine instance."  Which both are but still getting the error.  Report runs fine until I deploy it.  Any suggestions?  

An error has occurred during report processing.
Cannot create a connection to data source 'POSReportSupport'.
The feature: "The edition of Reporting Services that you are using requires that you use local SQL Server relational databases for report data sources and the report server database." is not supported in this edition of Reporting Services.
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Megan Brooks
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I've rarely used SQL Server Express myself, but the error message indicates something that, according to you, is not happening, namely that the data source databases and Report Server databases are spread across more than one server. Is there a difference in the connection strings that might cause the license check to conclude that they are on different servers?
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The connection strings point to the same IP address, but different databases.  Is there another way to do it?
From what I have read, that should work. It is limited to one SQL Server DB Engine instance. I am wondering, though, if the licensing code is being too picky. For example, for a local server you can specify the host of the DB server using the machine name, localhost\, or .\. If you are able to run the SSRS Configuration Manager, you might see what hostname it is using, although I don't really feel like that is the problem.

Is there another SQL Server instance on the same machine, or do you just have the one?
I did find this in my research, but I'm not sure what they are saying regarding expression based connections strings:

https://community.spiceworks.com/topic/1285492-sql-express-problem-with-ssrs-when-using-an-expression-based-connection-string
These are the 2 connection strings for the data sources.  db2 is the one that is failing.

Data Source=localhost;Initial Catalog=db1;Connect Timeout=60
Data Source=localhost;Initial Catalog=db2;Connect Timeout=60
Are your data source connection strings specified as constants (the usual way) or do you have one or more that is specified using an expression?
they are specified as constants.  I have verified that both databases are on the same instance.  I did find that we do have 2 instances of SQL Server.
Then it shouldn't be the issue described in the linked post. I was wondering earlier if the mere presence of another instance could cause problems. Report Server can have bugs. I know that for a fact. :-)

Can you try running the report with the other SQL Server service stopped? It's just a guess. If nothing else, it would confirm that the report isn't somehow trying to access the other instance inadvertently.
I stopped the 2nd instance with no change to the error.  What are your thoughts on adding the 2nd database as a Linked Database?
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Megan Brooks
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I got it to work.  I had made edit to the Data Source, but I found a post that stated sometimes the ds isn't overwritten when re-deployed.  I deleted the report and ds from the report server.  Deployed the ds and report again.  It worked!  I then restarted the SQLExpress instance and it still populated without error.  Thank you.
Data sources normally aren't overwritten on deployment, and usually you wouldn't want them to be. That prevents development connection strings from ending up in production. You do have to make sure that data sources on the server are valid, but once you do that then not overwriting ensures that they remain stable.