Under the root directory I have the following structure
..
..
..
web.config
Report Folder
- Login.aspx
- Web.config
|
|-> ViewReport
|
Create a virtual directory at the site root. This can be done via project properties in VS under the Web tab.
It's also possible that you have things defined in the sub-directory that should be in the root config file. See similar question here:
Error to use a section registered as allowDefinition='MachineToApplication' beyond application level