I do not know this error so it is just shot in darkness..... but:
Did you re-generate metadata recently? I guess you did - but still worth asking as there may be fields you have added to your qv document and which you may be filtering by when running OnDemand report.
I assume you can run report in template preview without errors?
Thanks for the reply. Template preview and On Demand preview yielded the same results. As far as regenerating the metadata, yes, it was done prior to running into the issues. I got past the error today by changing my level from using a chart to instead using a field. I can't explain it and it could be coincidence as it would not be the first time where I don't get consistent results doing the same sequence of steps.