If you get following exception while uploading / creating new report using Source Report Type -> Exising file

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[CrmException: Exception of type Microsoft.Crm.CrmException was thrown.]
  Microsoft.Crm.Application.Platform.Report.InternalCreate(String xml) +721
  Microsoft.Crm.Application.Platform.Entity.Create() +109
  Microsoft.Crm.Application.Forms.AppForm.RaiseDataEvent(FormEventId eventId) +408
  Microsoft.Crm.Application.Forms.EndUserForm.Initialize(Entity entity) +57
  Microsoft.Crm.Application.Forms.EndUserForm.Execute(Entity entity) +13
  Microsoft.Crm.Web.Tools.ReportProperty.ReportPropertyPage.ConfigureForm() +202
  Microsoft.Crm.Application.Controls.AppPage.OnPreRender(EventArgs e) +30
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The issue lay with our RS permissions.
In addition to failing to upload reports, we tried downloading them from CRM too. This gave us an NT permissions error.
So, we opened up (localhost)/reports, navigated to the CRM datasource (typcially 'Organization_MSCRM), then properties, then security,
and then added a user / group called NT AUTHORITY\NETWORK SERVICE,
and gave them the permissions of CRM Publisher.
After that it all worked fine.

Thanks to Lee/Ronald