Thanks for your response!
Granting these permissions was one of the 1st things I tried - tried again to double check and it still didn't work.
I've made some progress since my original post.. if I add my account to the 'Distributed COM Users' local group lets me connect via SSMS. Here's the link where I read this;
The question now is, why do we have to add users to this group and is there another way round it ? We've got other SSRS installations which we can connect to via SSMS without adding users to this group. Anyone know why ? I've checked group policies etc. Maybe something to do with the way SSRS has been installed ?