This paper presents a technique for the diagnosis of short circuits in power transmission networks as an instantiation of a general diagnostic approach which is applicable to discrete, dynamic systems. A three-layers diagnostic engine is formally defined, including local interpretation, global interpretation, and heuristic interpretation. The local interpretation focuses on the behavior of single protection components that are distributed over the power network and operate when a short circuit occur. The global interpretation provides a global behavior of the protection system by combining consistent local behaviors. Finally, the heuristic interpretation is meant both to eliminate a number of spurious global behaviors on the basis of application-dependent heuristic constraints, and to eventually localize the short circuit and possibly faulty protection components within the transmission network. The implementation of the proposed technique is under way. The resulting system will be tested by ENEL, the Italian electricity board, using the transmission network of part of northern Italy.