These is a folder that has shared datasources. If in the properties you have Overwritedatasources set to false, it can't delete whatever folder you have designated in TargetDataSourcesFolder.
Either change the Overwritedatasources to true or enter a new name for the data source folder for this report.
It took awhile, but as usual, when you see the answer it is so simple.
Things will work out. Get back up, change some parameters and recode.