It's a limit in system.web - http://weblogs.asp.net/hosamkamel/archive/2007/09/18/resolving-maximum-request-length-exceeded-exception.aspx

I changed the web.config under the reports and reportserver virtual directories to this to resolve the error:

It turns out that there is another limit at 64MB so any value larger than 65536 won't matter, but I haven't been able to determine where that limit is being set.