I've had the same issue.
Now it is SOLWED. Here is HOW TO.
1. Check the version of the LEM and the LEM Reports. They ought to be the same. If they are not match upgrade them to a latest version.
2. It is not enough to install LEM Reports with admin privileges. Explicitly use option "Run as administrator" to start Reports installation package.
3. To run a report. Explicitly use "Run as Administrator" option to start LEM Reports application.
Only such sequence of actions and conditions allowed me to get rid of the nasty " Logon failed. Error code -2147189176 "
Now it works fine for me.