Report execution service authentication errors

I'm trying to execute a report using the ReportExecution2005 service. However, I'm getting the following MessageSecurityException:

The HTTP request is unauthorized with client authentication scheme 'Ntlm'. The authentication header received from the server was 'NTLM'.

The inner exception is a WebException:

The remote server returned an error: (401) Unauthorized

The calling code is as follows:

       public static ReportResult ExecuteReport(ReportDefinition report)
        {
            // Render arguments
            string format = "PDF";
            byte[] result = null;
            string reportPath = ConfigurationManager.AppSettings["REPORT_PATH"];

            reportPath = Path.Combine(reportPath, report.Name);

            string historyID = null;
            string devInfo = @"<DeviceInfo><Toolbar>False</Toolbar></DeviceInfo>";

            string encoding = "";
            string mimeType = "";
            string extension = "";
            Warning[] warnings = null;
            string[] streamIDs = null;

            var res = new ReportService.ReportExecutionServiceSoapClient();

            string user = ConfigurationManager.AppSettings["REPORT_USERNAME"];
            string pass = ConfigurationManager.AppSettings["REPORT_PASSWORD"];

            var creds = new NetworkCredential(user, pass, ConfigurationManager.AppSettings["REPORT_DOMAIN"]);
            res.ClientCredentials.Windows.ClientCredential = creds;

            var parameters = new ParameterValue[report.Parameters.Count];
            int i = 0;
            foreach (var item in report.Parameters)
            {
                if (!string.IsNullOrEmpty(item.Value))
                {
                    var pv = new ParameterValue();
                    pv.Name = item.Key;
                    pv.Value = item.Value;
                    parameters[i] = pv;
                    i++;
                }
            }

            var userHeader = new TrustedUserHeader();
            ServerInfoHeader serverHeader;
            ExecutionInfo2 execInfo;

            var execHeader = res.LoadReport2(userHeader, report.Name, historyID, out serverHeader, out execInfo);

            res.SetExecutionParameters2(execHeader, userHeader, parameters, "en-us", out execInfo);

            serverHeader = res.Render2(execHeader, userHeader, format, devInfo, PageCountMode.Actual, out result, out extension, out mimeType, out encoding, out warnings, out streamIDs);

            var repResult = new ReportResult();
            repResult.Data = new MemoryStream(result);
            repResult.Encoding = encoding;
            repResult.ReportName = report.Name;

            return repResult;
        }
    }

    public class ReportDefinition
    {
        public string Name { get; set; }
        public Dictionary<string, string> Parameters { get; set; }

        public ReportDefinition()
        {
            Parameters = new Dictionary<string, string>();
        }
    }

    public class ReportResult
    {
        public string ReportName { get; set; }
        public string Encoding { get; set; }
        public MemoryStream Data { get; set; }
    }

The relevant (AFAIK) portion of the web.config looks like this:

  <system.serviceModel>
    <bindings>
      <basicHttpBinding>
        <binding name="ReportExecutionServiceSoap">
          <security mode="TransportCredentialOnly">
            <transport clientCredentialType="Ntlm" proxyCredentialType="Ntlm" realm=""/>
            <message clientCredentialType="UserName" algorithmSuite="Default"/>
          </security>
        </binding>
      </basicHttpBinding>
    </bindings>
    <client>
      <endpoint address="http://sqlfarm:80/ReportServer_JCAPPS/ReportExecution2005.asmx"
                binding="basicHttpBinding" bindingConfiguration="ReportExecutionServiceSoap"
                contract="ReportService.ReportExecutionServiceSoap" name="ReportServiceSoap">
        <identity>
          <servicePrincipalName value=""/>
        </identity>
      </endpoint>
    </client>
  </system.serviceModel>