Reporing service failure

we have setup up reporting server and while configuring database
Database setup > domain account is provided

It fails here @ grant rights. with following error

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w3wp!library!c!5/12/2008-00:25:22:: e ERROR: Throwing
Microsoft.ReportingServices.Diagnostics.Utilities.ReportServerDatabaseLogonFailedException:
The report server cannot open a connection to the report server database. The
logon failed., ;
Info:
Microsoft.ReportingServices.Diagnostics.Utilities.ReportServerDatabaseLogonFailedException:
The report server cannot open a connection to the report server database. The
logon failed. ---> System.Runtime.InteropServices.COMException (0x80070569):
Logon failure: the user has not been granted the requested logon type at this
computer. (Exception from HRESULT: 0x80070569)
at
System.Runtime.InteropServices.Marshal.ThrowExceptionForHRInternal(Int32
errorCode, IntPtr errorInfo)
at RSRemoteRpcClient.RemoteLogon.GetRemoteImpToken(String
pRPCEndpointName, Int32 type, Guid dataSourceId, String pUserName, String
pDomain, String pPassword)
at
Microsoft.ReportingServices.Library.ConnectionConfig.GetImpersonationUser(String userName, String domain, String userPwd)
--- End of inner exception stack trace ---
w3wp!webserver!a!5/12/2008-00:46:21:: i INFO: Reporting Web Server stopped
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Any help would be appreciated.

i also get following error in security log.

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Event Type: Failure Audit
Event Source: Security
Event Category: Logon/Logoff
Event ID: 534
Date: 5/12/2008
Time: 4:10:20 AM
User: NT AUTHORITY\SYSTEM
Computer: FM1MESQUITE
Description:
Logon Failure:
Reason: The user has not been granted the requested
logon type at this machine
User Name: sys_isppmsrs
Domain: ED
Logon Type: 2
Logon Process: Advapi
Authentication Package: Negotiate
Workstation Name: FM1MESQUITE
Caller User Name: sys_isppmsrs
Caller Domain: ED
Caller Logon ID: (0x0,0x841BB6A)
Caller Process ID: 3872
Transited Services: -
Source Network Address: -
Source Port: -


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thank YOu in Advance
.