First, I thought to check the Handler Mappings, since I've experienced a similar problem with the .axd extension not being mapped properly. No luck. The mapping existed, and was set properly.
After investigating, and digging into the problem a little deeper, it would seem the solution is to add a mapping specifically for the Reserved.ReportViewerWebControl.axd
These are the steps:
1. Open Internet Information Services (IIS Manager)
2. Select your reporting site
3. Click on the "Add Managed Handler" from the actions
4. Enter the information for your new handler:
5. Click 'OK'
SQL Server Web Report Viewer Issues on Longhorn/IIS7
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