I purely by chance noticed that what seems to be happening is the Data Federation service is crashing and restarting.
I found this because I worked out if I have the crash and log out of Webi and back in the report seems to work for a few refreshes before crashing.
Once crashed 5 times though I was getting some error about not be authorized to return data from the universe.
I logged into the CMC and by chance notice that the DF service had stopped - with the explanation being it had crashed 5 times within and hour.
I restarted it, switched to Webi to run the report and when it crashed I happened to flick to CMC and saw the service was initializing.
I've tried stripping back my report query by query to see if it's a specific data provider with no luck, even went through the universe and gave unique names to each object as I think I saw that suggested somewhere - still no luck.
Because of the way our environment is set up we have to have 3 sets of connections and 3 .DFX and repoint the universe to the appropriate DFX before promotion.
Because I've been playing around with all of the various components trying to fix this issue, our DEV Webi environment is currently using the PROD connections ad universe.
I happened to notice last night that it doesn't seem to crash in DEV !!! i.e. I ran the report about 20 times with various prompt values and no issue.
So, now I have to work out what the difference is between the two environments - needle in a haystack - could be any setting any where or something in the promotion - meanwhile my boss is suggesting we 'give up' on multi source universe and try and rework the report using two single source universes.