<p>My scheduled reports in SQL server won't run. I checked the logs and found the job that was failing. The error message in the log was:</p>

<blockquote>
  <p>'EXECUTE AS LOGIN' failed for the requested login 'NT AUTHORITY\NETWORK 
  SERVICE'. The step failed. </p>
</blockquote>

<p>I'm using SQL authentication for the report so it shouldn't be issues with the permissions to the data. No sheduled reports on the server will run.</p>

Can you check the permissions for your Network Service account?  Specifically make sure they have the "Act as part of the OS" permission.  If I'm reading the error message correctly, it looks like the NT AUTHORITY\NETWORK SERVICE account failed to execute as a logged on user. It doesn't look like it ever got to the query, looks like it's failing in the Windows authentication portion, so never gets to the SQL authentication piece.
You might also check the Security Event Log in Windows.  If it is an authentication problem, there might be additional information logged by the OS.