request failed with HTTP status 401

Hi,
I got a strange error (The request failed with HTTP status 401: Access
Denied), when I try to call ReportServer WebService.
I have my own web service which calls a C# component and this compoenent
Instantiates RS web service and try to call any method. It throws the above
error.
But If I have a normal web Application, which calls same C# component(inturn
component calls RS web Service), it works fine...

Web Application ---> C# Component ---> RS WebService -- Working
Web Service ----> C# component ---> RS WebService -- Not Working

I gave anonymous access to RS webService and to my web service also...
I write
rs.PreAuthenticate = true;

rs.Credentials = System.Net.CredentialCache.DefaultCredentials;
But still it is not working. Help me in this..

Thanks in advance,
Ramesh

Ramesh