I have a report with 10 parameters and 8 of them allow multiple value selections and their default values are set to all (with all items ticked). When I run the report in BIDS it throws the above error complaining about Uri string being too long. After a bit of Google, one blog suggested to deploy the report then run it from the report manager/report server. Amazingly, the error is gone and I could run the report with no problems.
http://ppalakollu.blogspot.com.au/2012/06/sql-server-2012-reporting-services.html