Can you run the report manually in Console? There are several reasons you can get a logon failed error even though the credentials are correct, so I would confirm first if you can run the report normally first. If not try the following-
- Ensure the path to the file matches the case as it appears in explorer
- Use a fully qualified domain name in the path (instead of \\server\path\file.rpt try \\server.domain\path\file.rpt)
- Use an IP address in the path (instead of \\server\path\file.rpt try \\192.168.0.1\path\file.rpt)
we were getting similar errors despite the fact the username and password were correct. can't recall where i read it but one suggestion was to try and set up a username on the sql side with no password and then using this for the report. tried this with no error and the email outputting the report correctly.