1. A method for isolating the location of a defect in a scan chain, the scan chain having a scan-in pin and a scan-out pin, comprising: performing diagnostic fault simulation on a plurality of scan chain faults, wherein the plurality of scan chain faults along a scan path of the scan chain are consistent with a nature of the defect; gathering statistics for each of said plurality of scan chain faults based on the diagnostic fault simulation, wherein the statistics for each scan chain fault includes failures predicted by the scan chain fault; creating a composite fault for each of a plurality of locations on the scan chain by compositing the statistics for a subset of the scan chain faults, wherein the composite fault simultaneously models the behavior of the subset of the scan chain faults located between each of the plurality of locations and the scan-out pin of the scan chain; and determining the location of the defect on the scan chain based on which one of the composite faults is closest to predicting failure measurements at a tester.