Do you get this error at runtime only and you are able to preview the reports in Visual Studio? If so be aware that whenever the reports are defined in a class library, you use SqlDataSource component for your DataSource and you save the connectionString in the settings for this class library, always remember to copy the corresponding connection string entries from the class library's config file to the application's config file (in case of web application - web.config. Otherwise at runtime when the application's config file is respected the Settings
object will not be able to find such connection strings and will return the default value from its metadata.
the Telerik team