Answer
Check that the specific report's layout file is actually placed in the correct location inside the Crystal Web Service's OpenReportPath directory (found in that service's web.config file) — for an Operational Report, IFS expects a subfolder named after the ordering language (for example, an 'en' folder for reports ordered in English) inside OpenReportPath, with the Crystal layout file copied into that language-specific subfolder. A report that loads and prints fine in Crystal's own designer can still fail through Crystal Web Service if its layout file isn't sitting in the specific language subfolder the service expects.