I think the problem has to do with duplicate groups or users. What happened in my case is we had a gradual migration from one domain to the other. We set up groups in the new domain and kept the old domain. When the server was migrated from the old domain, groups were re-created in the new domain and created duplicates. This is what is generating the error in Reporting Services.
The fix - 1. Backup the reporting services database just in case!!!
2. Document what the existing permissions
3. Try and delete all the duplicates at one time.
What happened in my case is that everything but the builtin\administrators was removed. Rather than deleting just the duplicates it deleted all the groups.
4. Add the groups back from the documentation in step 2
Try deleting it from the Enterprise Manager.