SSRS reports are not supported for Google Chrome browser. (http://msdn.microsoft.com/en-us/library/ms251673.aspx ) . Even firefox has issues while rendering ssrs report iFrames but this workaround seems working for firefix (http://bobp1339.blogspot.com/2010/08/ssrs-fix-for-firefoxchrome-report-size.html) .
The problem with google chrome is a known issue if we use report manager . The ideal solution is to use report viewer (http://localhost/reportserver ) instead of report manager (http://localhost/reports).