I was recently involved in a situation were the Reporting Library deployment from Dynamics AX 2009 to SQL Server 2008 Reporting Services was not working correctly. More concrete, after the Reporting Libraries were extracted, compiled and the deployment to the SSRS started, soon the following error was displayed:

Unable to connect to http://server/ReportServer/ReportService2005.asmx as specified in the config file for the report server at C:\...\RSReportServer.config. If this url is not correct please update the config file, otherwise make sure the report server is configured correctly.

Besides the Report Library deployment also the other Ad’Hoc reporting functionality like the updating of Report Models was failing with different error messages.

It took us a while to find out – and actually we had to trace the HTTP communication to get a clue – but the root cause of the issue was the Proxy configuration from the Internet Options in Windows.

At some point in the middle of the communication with the ReportService2005.asmx Web Service the configured Proxy Server was closing the connection with:

HTTP/1.1 500 Internal Server Error Server

By turning off all Proxy servers (automated and manual) in the Internet Options the deployment of the Reporting Libraries finished successfully. After the deployment was finished the Proxy configuration could be restored.