NetworkCredentials problem

[Russell]

I am using a NetworkCredential object with a web ReportViewer to access
ReportingServices:

ReportViewer1.ServerReport.ReportServerCredentials = new Cred();

The "Cred" object implements
Microsoft.Reporting.WebForms.IReportServerCredentials and its
NetworkCredentials property instantiates and returns

new System.Net.NetworkCredential(
user,
pwd,
domain );

When my page runs on a DIFFERENT server from the one the ReportServer
web service is on it authenticates. But when on the same server
(WIN2003) authentication fails. At first I was seeing errors in the
System log but after editing "netman" in component services to let
"Everyone" use "Local Activation", those errors went away. However, I
still get "401: unauthorized" errors when my page is on the server.

A successful (remote) login adds a slew of entries to the "security"
log:

Logon attempt using explicit credentials:
Logged on user:
User Name: NETWORK SERVICE
Domain: NT AUTHORITY
Logon ID: (0x0,0x3E4)
Logon GUID: -
User whose credentials were used:
Target User Name: xxx
Target Domain: yyyy
Target Logon GUID: -

Target Server Name: localhost
Target Server Info: localhost
Caller Process ID: 4696
Source Network Address: -
Source Port: -

is followed by entries indicating the xxx account logged on.

A failed local one has only one entry:

Logon attempt using explicit credentials:
Logged on user:
User Name: NETWORK SERVICE
Domain: NT AUTHORITY
Logon ID: (0x0,0x3E4)
Logon GUID: -
User whose credentials were used:
Target User Name: xxx
Target Domain: yyyy
Target Logon GUID: -

Target Server Name: yyyy
Target Server Info: yyyy
Caller Process ID: 5564
Source Network Address: -
Source Port: -

The only things that are different are the Target Server Name and
Target Server Info values, "localhost" for the successful attempt,
server name for the failures.

Anyone have any idea how I can resolve this?