Windows 8.1
I resolved this with help from the answer by Austin McLaughlin posted earlier. In my case I had been logged in with a local account that had administrator privileges, but attempting to http://127.0.0.1/Reports (hearinafter referred to as "the Reporting Services Manager") produced the error reported by the OP.
The key for me was that the Administrator account was disabled by default in my Windows 8.1 laptop. Note that I did not originally have Windows 8.1 Pro, so there was no "Local Users and Groups" under "Computer Management". Thus, I had to purchase the Windows 8.1 Pro Pack online from MS for $100.
- In Windows Explorer, right click on the Computer node and select "Manage".
- Navigate to Local Users and Groups > Users
- Right click on Administrator and select Properties
- De-select "Account is disabled"
- Restart PC
- Log in to the PC as Administrator (I did not have to enter a password for the Administrator account on first login.)
- From the desktop, run IE. No need to run as Administrator, of course, since you logged in as Administrator.
- Navigate to the Reporting Services Manager.
At this point you should be logged in to the Report Administrator and on the Home screen. I had not been able to get this far before.
- On the Home screen, click "New Role Assignment"
- In "Group or user name", enter the local administrator account you use for development; i.e.: [yourmachine]\[username]
- Select all the checkboxes (shortcut is to click the checkbox to the left of "Role") and click OK.
- In the upper right hand side of the page, click Site Settings.
- On the left side of the page, click Security.
- Click "New Role Assignment"
- In "Group or user name" enter the same account as in step 10
- Check "System Administrator" checkbox and click OK
- As a precaution, disable the Administrator account that you enabled in step 4.
- Log out, then back in with your local account from step 10.
- In IE, browse to the Reporting Services Manager. Note: It was not necessary for me to start IE as Administrator.
At this point you should be able to access Reporting Services Manager page, and configure reporting services further.