Unfortunately, I have seen this error as well and it could be a number of things.  I don't have a direct answer for you, but you might consider the following:

1. Is your SSRS server on a different box from the K2 workspace and/or K2 server?  If yes, are you 100% sure that Kerberos is working correctly? 

2. Are you able to navigate to the SSRS web site and run the Process_Overview report from there?  If SSRS is not installed on the same machine as the K2 workspace, try using an RDP session to log into the SSRS box and running the Process_Overview report locally from the SSRS server.  This will help eliminate some Kerberos issues, but if this works, then Kerberos is probably you're issue.

3. What account are you using for the SSRS application pool account?  There are some white papers/documentation floating around that specify that you can use the Network Service acccount or the Local System account.  In my experience neither of these options work and you will need to use a domain account as the SSRS applicaiton pool account.  Make sure you use the SSRS configuration tool to configure this if it needs to be changed.

I would advise you to log a high priority ticket with K2 support if this is urgent.  The support team should be able to look into this further.