You will be pleased to know that I have finally resolved this problem. Last week, Sean Donovan and I worked together and were able to recreate this report in version 17.3. While we were recreating the report, we did discover that one of the report objects (CH33) was in a container and this object also used the paging field. So we duplicated the object on the nprint sheet. That was necessary to make it work properly in 17.3. The object list ( even in 17.3 ) does not show objects that are embedded in containers.
So, back to 16.5.
During the testing, I was building some new test objects on the nprint sheet. Even with a simple report with one column, it was failing like above. Finally, I added a new sheet and then added some test objects and the report worked with paging just fine. I then noticed every time I went to the nprint sheet, it restored the on activation triggers.
The final solution was to remove the sheet triggers. Once I removed the sheet triggers for the nprint sheet, the pages cycled properly on the server on the report above. I have tested this with multiple solutions and charts and feel confident this was the cause of the issue.
It would seem that version 16.5 has issues with both containers and sheet triggers.
Please mark this correct so others can benefit in the future.