Error “Thread was being aborted” when deploying reporting extensions

Some time ago we run into problem which did not let us deploy reporting extensions to SQL Reporting Services. Just after building libraries we got the error:

[ThreadAbortException]: Thread was being aborted.
at System.Web.HttpApplication.ExecuteStep(IExecutionStep step, Boolean& completedSynchronously)
at System.Web.HttpApplication.ApplicationStepManager.ResumeSteps(Exception error)
at System.Web.HttpApplication.System.Web.IHttpAsyncHandler.BeginProcessRequest(HttpContext context, AsyncCallback cb, Object extraData)
at System.Web.HttpRuntime.ProcessRequestInternal(HttpWorkerRequest wr)

Because the error was very cryptic it took us a lot of time to find the solution for this problem.

In the end it happened that  although all other components on other machines (AOS, Enterprise portal, etc) were already upgraded to SP1 RU3, we totally forgot to upgrade machine were SQL Reporting Services and Microsoft Dynamics AX 2009 Report Deployments tools were installed. After upgrading first to SP1 and then to RU3 we managed to deploy reports.

Please note if you are running AX 2009 RTM version and also running into issue, it can be that you did not apply KB 957312 on machine were Microsoft Dynamics Ax 2009 Reports Deployments tools were installed.