Dynamics CRM 2011 Report Error 'Sys' is undefined and 'Type' is undefined

On a load balanced environment with multiple front-end servers users receive intermitent report errros with the following error messages:

Message: 'Type' is undefined

Line: 5

Char: 1

Code: 0

URI:...

Message: 'Sys' is undefined

Line: 1228

Char: 1

Code: 0

 URI: ...

Message: Object expected

Line: 993

Char: 1

Code: 0

URI:...

I found that the reason for the above errors were related with front-end servers configured with different machine keys, when the traffic hits SERVER1 and if the following request's hit SERVER2 the decryption key will be unable to process the request's causing those errors.

Configure all front-end servers with the same Encryption and Decryption Machine key:

Open IIS and High light Microsoft Dynamics CRM website

Double click Machine  Key

Click on the right generate machine key:

Copy those keys onto all front-end servers.

This should fix the issue. Also confirm you have all SPN's correctly configured for your service accounts.