After spending an untold number of hours trying to get a Reporting Services Extension to work I thought I should pass on the knowledge to others… Basically, it’s all about security and the rssrvpolicy.config file. This file is a little confusing especially as the default installation uses a weird indent. This article on code access security pretty much covers everything except where to put your new code group definition.
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I have removed has much as possible from the file to illustrate where your new definition goes. See the nesting? The outer one says match the first inner one or set permissions to nothing. Then a code group Report_Expressions_Default_Permissions sets up the default expression permissions. The next code group has a membership condition of Zone="MyComputer" with a bunch of full trust Microsoft code groups. Finally, the last one is for SharePoint. Your new code group goes directly after this one at the same level.
Hope that saves someone some time.
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Disclaimer The opinions expressed herein are my own personal opinions and do not represent my employer's view in any way.