Thanks for your help anyweb. This ended up highlighting the root cause and fixing my issue:
Modified the registry key per instructions:
alternatively try this, open regedit and change the following reg key value.
[HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\SMS\SRSRP]
"SRSInitializeState"=dword:00000000
The value should be changed to 0, then wait for the value to change back to 1. It will change to 2 for a while. You can amonitor the srsrp.log while you wait
Once modified I then found these errors in the srsrp.log:
System.Web.Services.Protocols.SoapException: An error occurred within the report server database. This may be due to a connection failure, timeout or low disk condition within the database. ---> Microsoft.ReportingServices.Diagnostics.Utilities.ReportServerStorageException: An error occurred within the report server database. This may be due to a connection failure, timeout or low disk condition within the database. ---> System.Data.SqlClient.SqlException: The transaction log for database 'ReportServer' is full due to 'LOG_BACKUP'.~ at Microsoft.ReportingServices.Library.ReportingService2005Impl.SetProperties(String Item, Property[] Properties, Guid batchId)~ at Microsoft.ReportingServices.WebServer.ReportingService2005.SetProperties(String Item, Property[] Properties)
This is a self contained SCCM with SQL 2014 on the same server. I opened up the ReportServer database -> Properties -> Files. The ReportServer_log autogrowth was set to "By 10 percent, limited to 40MB". We changed this to unlimited and I re-ran the script again and it is now processed correctly. The bitlocker management folder now exists and I am back on path.