I am no expert in anyway. However, I see that it is noting a time out? Does the message come up immediately or does the report try to run and then you get the message?
I have gotten this myself when I am trying to query 25,000 records. SQL can get the data...but telerik just can't render it fast so I have to limit.
Perhaps try to use a Select Top 100...... in your query to see if it is just SQL timing out on you.