This required opening an incident with Microsoft PSS. They do not know why it occurred nor how to correct it but the user/ service used in the SSRS configuration tool would not work. Creating a completely new administrative user with exactly the same privileges and creating new databases with the tool successfully got past the error. After that we were able to use the browser reports interface to reconfigure the db connection strings for the reports and then import all the reports from files. All in all a very painful experience but its now working.