Fault Protection Assemblies are used in cyber-physical systems for automated fault-isolation. These devices alter the mode of the system using locally available information in order to stop fault propagation. For example, in electrical networks relays and breakers isolate faults in order to arrest failure propagation and protect the healthy parts of the system. However, these assemblies themselves can have faults, which may inadvertently induce secondary failures. Often these secondary failures lead to cascade effects, which then lead to total system collapse. This behavior is often seen in electrical transmission systems where failures of relays and breakers may cause overloading and the disconnection of parts of an otherwise healthy system. In the past, we had developed a consistency based diagnosis approach for physical systems based on the temporal failure propagation graph. We now describe an extension that uses the concept of timed discrete event observers in combination with the timed failure propagation graphs to extend the hypothesis to include the possibility of failures in the fault protection units. Using a simulated power system case study, we show that the combined approach is able to diagnose faults in both the plant and the protection devices.