This got resolved with the help of a consultant from our cloud hosting providers;
He found the solution from articles i actually came accross but didn't read fully so i didn't find the communality with my issue...It turned out to be a bunch of orphaned events that were logged in the Events table, but weren't getting processed. Overtime it seemed to have built up to the point that RS Wasn't able to either create new events or even subscriptions in some cases.
I don't have the full detail as to how the consultant fully resolve the issue, but these articles really cover the issue well and also help identifying failed events in the RS logfile, which i couldn't really make sense of at first either.
http://blogs.msdn.com/b/deanka/archive/2009/01/13/diagnosing-and-troubleshooting-subscriptions.aspx
http://blogs.msdn.com/b/psssql/archive/2009/02/02/why-aren-t-my-subscriptions-working.aspx
This was a pretty cool exercise that lead me to much better understand how RS Works are what the different processes that occur when a subscription report is executed. Also learned how to query the different RS tables to get the required info. If anyone would like to add feel free!