Doing one on a local and one on a network drive was a good idea.
So the project on your local drive functions and the project on the network drive does not. I wonder if this is an issue with the network paths being handled incorrectly. In the local and network drive projects, does the result of getwd() look different?
Testing absolute path to templates
You can supply an absolute path to a template by calling knit2pdf directly. Is knitr able successful generate hmtl when you call it in this fashion?
library(knitr)
template_path <- file.path("path", "to", "input.Rmd")
output_path <- file.path("path", "to", "generated.html")
report_env <- new.env()
knitr::knit2html(input = template_path,
envir = report_env,
output = output_path)