Building a Data Warehouse
Solution 1:
There are few things I would look at before redesigning your database.
- I'm pretty sure that reporting services doesn't need a star/snowflake to do its work so you might see what you can build with your nomalized database.
- Try building views that denormalize your OLTP data. It will get you thinking about the design aspects that you will need if you do redesign your database.
Solution 2:
It pretty much is, unless you dump the whole SQL side and build the repository in a Cube - in which case you MAY get away with an OLTP schema underlying the data.
The main problem is that a non-star-schema approach simply puts a lot of burden on the server for analysis. That said, the idea to sue analysis services is terrific - they shine in this area. Just try whether you can directly load them from... the OLTP schema, possibly a snapshot of that.