According to Microsoft, Microsoft SQL Server 2008 Reporting Services and SQL Server 2008 R2 Reporting Services have the following limitation.
Report Manager fails after you enable FIPS-compliant algorithms in Local Security Policy
When running Microsoft SQL Server 2008 Reporting Services and SQL Server 2008 R2 Reporting Services, you cannot use Report Manager if you enable the following Local Security Policy:
System cryptography: Use FIPS compliant algorithms for encryption, hashing, and signing.
There is no workaround for this issue. To use Report Manager, disable the setting and restart the Report Server service. For more information about this issue, see http://msdn.microsoft.com/en-us/library/ms345220.aspx.
For additional configuration options, see Microsoft Knowledge Base article.