The model-based diagnostic approach was first introduced to overcome the li
mitations of heuristic systems. However, research on model-based systems sh
owed that the model-based diagnosis approaches resort to assumptions that c
an be viewed as the return, though controlled, of heuristics into diagnosti
c reasoning. In this paper we focus on diagnosis with component-oriented de
vice models. We argue for the need to represent and reason with these assum
ptions. We present a conditional logic, DL, That is suitable for diagnostic
reasoning and allows us to represent and reason with assumptions.