Ensure that the folder specified in the TempFolder Application Property, within the Global Settings in versaSRS which specifies the path to write the mail services log files has full control permission for the account that is running the services.
Further to this, if the connection string in the versaSRSDSN.xml file, default location C:\Program Files (x86)\VersaDev\versaSRS\VersaSRSWindowsServices, is set to use Integrated Security instead of a set username and password the versaSRS Windows Services cannot be run as Local System but must be a Network Service account.