Security – Report Server: login failed to master database

I would test with an explicit account that I set up on the local computer and put into the IIS app as the anonymous user. That way you can test it from SSMS or VS and be sure that you can connect to the server and database without issue.

Once that is working, or if it's not, you can debug where in the ASP side it might be failing. The SQL side is simple, though I've not tried the Network Service account. Should be no reason it doesn't work, but I haven't seen anyone use it.

Ultimately this turned out to be a database version mismatch, not at all an authentication/authorization problem as the “failed login” message indicates.

I found that there is a bug in the database-version upgrader: it emits scripts that do not properly quote database names, so for database names like mine which tend to have lots of spaces etc. it emits statements like USE Report Server (Sandbox)TempDB (instead of USE [Report Server (Sandbox)TempDB]), and the upgrade fails. The resolution is to have the tool emit the upgrade script, manually fix it up, and apply it yourself. See http://www.eggheadcafe.com/software/aspnet/30860451/database-problem.aspx

Here are a few more hints:

• When the Configuration Manager gives you “messages” at the bottom of a page, you can click on a message to see more details. (There is nothing to clue you in to this fact; it took me quite a while to realize that the tool was willing to explain to me that the database was out of date, if only I magically clicked on something that doesn’t invite clicking.)
• When you’re asking it to generate an upgrade script for you (click the Script… button, then click “Upgrade Database Script” at the left) it prompts you for “Server Version”. This is actually asking for the version of SQL Server Reporting Services that corresponds to the database version you are trying to upgrade from, which is an awkward thing to come up with. It seems that database version C.0.8.40 corresponds to Reporting Services 2005, while database version C.0.8.43 corresponds to Reporting Services 2005 SP1. (C.0.8.54 corresponds to Reporting Services 2005 SP2.)
• The generated script seems to be reasonably robust against partially-applied updates, but on the other hand it will happily partially update your database version. So you might do well to take precautions like beginning and committing trivial marked (named) transactions in the housekeeping DBs before you run the update script (for easier point-in-time restore should something go pear-shaped), wrapping the entire script in a BEGIN TRAN/COMMIT TRAN and running it with sqlcmd -b, etc.