Since the seminal work of Sampath et al. on diagnosis of discrete-event systems (DESs) in 1996, the basic notions of fault and diagnosis have been remaining conceptually unchanged: faults are defined at component level and diagnoses incorporate the occurrences of component faults within system evolutions. As this approach may be unsatisfactory for a complex DES, whose topology is typically organized in a hierarchy of abstractions, we propose to define different diagnosis rules for different subsystems in the hierarchy. Relevant fault patterns are specified as regular expressions on patterns of lower-level subsystems. Separation of concerns is achieved and the expressive power of diagnosis is enhanced: each subsystem has its proper set of diagnosis rules, which may or may not depend on the rules of other subsystems. The approach yields seemingly contradictory but nonetheless possible scenarios: a system can be normal despite the faulty behavior of a number of its components (positive paradox); also, it can be faulty despite the normal behavior of all its components (negative paradox).