A diagnostic tool based on a hybrid knowledge representation of a system under test is disclosed. Data collected from the system during its operation is compared to an event based representation of the system which comprises a plurality of predefined events. An event is recognized when the collected data matches the event's critical parameter. The recognized event is analyzed and an associated set of ambiguity group effects, which specify components to be re-ranked in an ambiguity group according to an associated ranking effect. Additonally, a symptom-fault model and a failure model can be analyzed to determine symptom-fault relationships and failure modes which are applicable to the system operation. Each applicable symptom-fault relationship and failure mode is also associated with a set of ambiguity group effects which rerank the ambiguity group. A structural model is analyzed starting with the components in the ambiguity group having the greatest probability of failure. As a result of the analysis, maintenance options specifying tests to be performed on the system are output.