We faced similar problem in one of our environment and it ended up the problem with ODBC. We had Data Direct ( third party ) ODBC for Oracle and this server was 4 processor and we had license only for 2. Well the ODBC was working fine as it was using the evaluation key for some reason to make sure it runs on 4 proc machine. Then when the expiration date came, we got this problem where the instances simply hang in RUNNING stage.We never had this problem with Data Direct ver 4.1 but got it with data Direct 4.2
The simple test to determine if this is the problem, run the report in crystal designer on same server, you should get a warning or prompt saying you are not registered and make sure to register it, one u hit OK the rpeort works fine in designer but not on CE.
The other way to determine this is use any other ODBC conn may be CR ot Microsoft for testing it. if it runs fine then this was issue for sure.
There was a hot fix on business objects website if the instances are showing PENDING i repeat PENDING and not RUNNING., but if they are hanging in RUNNING, please make sure to do above test...