Failure isolation in a distributed processing system of processor nodes coupled by a multi-drop bus network. The processor nodes have information of relative locations of the processor nodes on the network, and have an associated local error indicator, such as a character display. Each node independently tests access to other nodes on the network, and upon detecting a failure to access one or more nodes, determines, from the relative locations, the node having failed access which is closest. The failure detecting processor posts, at its associated local error indicator, an identifier of the closest failed access node. A user may inspect the local error indicators and thereby isolate the detected failure.