It is shown that the path delay fault (PDF) model may not be very effective in guiding post silicon debug. It is also shown that the multiple transition fault (MTF) model allows for significant reduction of the initial suspect set. However the number of faults is much higher than the number of PDFs. A Monte Carlo approach is presented that uses multiple transition faults with appropriately assigned weights to identify defective embedded segments. It is experimentally verified that the approach guides diagnosis more efficiently than the path delay fault model. Fault-implicit algorithms are presented to cope with fault-related scalability challenges. Our results in ISCAS '89, ISCAS'85, ITC '99 benchmarks show a huge reduction in the suspect set using the proposed fault model and algorithms. It is shown that the proposed method guides effectively fault diagnosis.