CR7 and Windows Server 2008 R2 - Connection to Report Server Failed

First question, does anyone know if Crystal Reports 7 web services work on Server 2008?

If it simply doesn't work, please skip the rest of this :)

Otherwise, this was working on Server 2003 and I'm working on a transition to Server 2008.

Everything is installed and both web page and image services are running.
I'm launching reports via URL similar to this:
http://somedomain.com/scripts/crweb.exe/someReport.rpt

The client side viewer is installed and working correctly since I can see reports from other servers running server2003.

When I try to run any report I'm seeing 1 of 2 error messages in the browser:

• Connection to Report Server Failed
  An Invalid Message Encountered.

To start with, after installing CR7 on the server it wasn't able to create the samples directory/website on the default website. Install logs show all attempts using confiis4.exe to setup the default website samples failed to initialize COM etc. I did try to set this up manually but it fails when launching a sample report in the same way that my client app fails.

If I stop the crystal web page and image services, the error messages don't change so I'm assuming the problem is happening before it tries to utilize those services.

I've opened up security access to everyone everywhere but so far it doesn't make a difference.

I see nothing in any event logs.

The biggest challenge I have right now is I'm not getting any useful feedback like detailed error messages, logs or event entries. So, I'm essentially just doing blind troubleshooting.

Any suggestions?

Any other forums or websites I should visit?

Cheers