After a lot of headaches, I was able to resolve this issue. This is what I did and how I got the issue resolved.
I installed this same .NET web application on another Windows 2008 Small Business. I did it a little differently this time, though. Instead of using the default web site in IIS for the creation of a virtual directory, I had to use the Create Web Site Wizard in IIS to generate a new database. I chose framework 4 integrated application pool, btw. I browsed to the application and once again, the crystal report viewer would not work.
Some other forum threads suggested changing your web.config and essentially telling the assembly where to find the crystalreportviewer13 runtime engine support files. This is what clued me into what exactly is going on. The crystal report viewer doesn't know how to render with out these script files, css files, etc. If it can't find the path to these files, it can't render the crystal report viewer. How I understand it is the crystal report viewer is dependent upon the runtime engine installation files for .NET Framework 4 (32 & 64 bit installs). These assembly files don't get included in your .NET project. I think that is a HUGE oversight by Visual Studio --- why not include ALL files required to run your object!?!? Sorry, anyway, here's all I did:
1) Go to the C\inetpub\wwwroot folder on any machine that has either/or crystal report runtime engine installations. For my purposes, I just went to the one on the 2008 server I'm installing on.
2) Copy the aspnet_client folder in the wwwroot directory.
3) Paste this folder in the website directory folder. I assume this would work with a web application that was created from a virtual directory as well, just paste it into the virtual directory.
You may be able to avoid this by creating all of the necessary folders and sub folders, then copying over each file into your web application project on your development machine, in order to include them in your published, complied web application. If this is confusing, just perform the steps above in the deployment environment.
Here's my forum post on SAP: