We are using CiscoWorks 3.2 and have defined some CM Topology Groups. When a router has a problem, it appears red in the Topology Group but the cloud of the group doesn't turn red. I am aware that CM is not a Fault Management application, but as it is now linked in to DFM would it be possible to have hierarchical propagation? This would allow the topology map to be useful for large deployments.
No, this is not currently possible. The DFM events are tied to specific devices, and not propagated up to switch clouds. However, I think such a feature would be useful. It may be possible to add a status icon to the switchcloud. However, this would require an enhancement request (PERS) from your account team or SE.