sql server reporting services: What does the following error mean and how do I resolve this matter?

ERROR:

'EXECUTE AS LOGIN' failed for the requested login 'NT AUTHORITY\NETWORK
SERVICE'. The step failed.

I am also experencing this error when the SQL agent tries to execute the step
to run the AddEvent stored procedure which generates the report. The SQL
agent runs under a domain service account which is sa to the SQL server. It
appears that the default owner of SQL Agent jobs is NT AUTHORITY\NETWORK
SERVICE.

We also have a production server running SQL 2000 reporting services with an
identical security configuration. The jobs are invoked on this server with
no isssues.

It seems that the SQL 2005 Agent service account is unable to impersonate
the local network service.

Please advise,

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