I would like to add few more details to the question. The reports were initially created on Crystal Reports 10 and I installed Crystal Reports 2008 as part of the system upgrade. I tried to open the report file (.rpt) in Crystal Reports 2008, clicked on the Refresh button and provided the DSN name, user id and password which gave the error messages attached in the above post.
The System DSN worked fine when I tested the connection as part of creating the DSN.