SQL Server Reporting Services 2005 Service Would Not Start On Windows Server 2003

SQL Server Reporting Services 2005 Service would not Start on windows server 2003. Working great till yesterday and no changes were made to config file.

Here is the error in Event log


Event Type: Error
Event Source: SQL Server Report Service
Event Category: None
Event ID: 0
Date: 12/13/2007
Time: 8:25:59 AM
User: N/A
Computer: XXXXXXXXXXX
Description:
Service cannot be started. Microsoft.ReportingServices.Diagnostics.Utilities.ServerConfigurationErrorException: The report server has encountered a configuration error. See the report server log files for more information.
at Microsoft.ReportingServices.Library.ServiceAppDomainController.Start(Boolean firstTime)
at Microsoft.ReportingServices.NTService.ReportService.OnStart(String[] args)
at System.ServiceProcess.ServiceBase.ServiceQueuedMainCallback(Object state)
For more information, see Help and Support Center at http://go.microsoft.com/fwlink/events.asp.


Here is i found in log files
ReportingServicesService!resourceutilities!4!12/13/2007-08:25:59:: i INFO: Running on 0 physical processors, 1 logical processors
ReportingServicesService!servicecontroller!4!12/13/2007-08:25:59:: e ERROR: Exception caught loading and setting code permissions policy level: System.Security.XmlSyntaxException: Invalid syntax on line 158.
at System.Security.Util.Parser.GetRequiredSizes(TokenizerStream stream, Int32& index)
at System.Security.Util.Parser.ParseContents()
at System.Security.Util.Parser..ctor(Tokenizer t)
at System.Security.SecurityManager.LoadPolicyLevelFromStringHelper(String str, String path, PolicyLevelType type)
at System.Security.SecurityManager.LoadPolicyLevelFromString(String str, PolicyLevelType type)
at Microsoft.ReportingServices.Library.ServiceController.SetAppDomainPolicy()
ReportingServicesService!servicecontroller!4!12/13/2007-08:25:59:: e ERROR: Error Starting Service: System.Security.XmlSyntaxException: Invalid syntax on line 158.
at System.Security.Util.Parser.GetRequiredSizes(TokenizerStream stream, Int32& index)
at System.Security.Util.Parser.ParseContents()
at System.Security.Util.Parser..ctor(Tokenizer t)
at System.Security.SecurityManager.LoadPolicyLevelFromStringHelper(String str, String path, PolicyLevelType type)
at System.Security.SecurityManager.LoadPolicyLevelFromString(String str, PolicyLevelType type)
at Microsoft.ReportingServices.Library.ServiceController.SetAppDomainPolicy()
at Microsoft.ReportingServices.Library.ServiceController.StartService(Boolean firstStart)