Permissions issues with SQL 2008, Report Builder 2.0-Collection of common programming errors

So here’s a bit of context for the horror story:

• Win 2003 SP2 64bit running on a VM exposed to outside world for web access.
• SQL Server 2008 Std SP2 64bit with Reporting Services (RS) installed for native mode (i.e. not sharepoint mode).
• IIS 6 .NET 3.5 web site app written to use the web services from RS. The site has been set to use Windows Authentication and nothing else.
• To save writting custom authentication since I don’t need it for this demo I have set-up a local account in Win 2003, i.e. servername\myDemoUser, effectively allow fake Windows Authentication.
• Default.aspx lists folders on RS and the reports from each folder. It also has a link to the Report Builder 2 on the server.
• The rsreportserver.config has been changed so that the only is since can’t work since it’s across the internet and users will not be on the same network (hence the local account myDemoUser).
• The web site app has url of the form: http://mysite.mydomain.co.uk/ and the link on it to the Report Builder is of the form: http://mysite.mydomain.co.uk/services/reportbuilder/reportbuilder_2_0_0_0.application, in this case RS has been configured so the Web services virtual directory is “services”.
• The web.config for the website app has been set to