Re-build RAID array after failure

I have a PE2500 with a single RAID 5 array (PERC 3/Di) consisting of three Seagate ST336754LC disks. Recently one of the disks failed and i replaced it with a ST33660LC which was the closest I could get. The disk appears in the array and I've initialised it but the array does not attempt to rebuild. I have tried assigning it as a dedicated spare but the disk always shows the space (33.9G) as unallocated.

I have been using Dell OMSA but have even tried uninstalling and using the older Array Manager console.

The new disk is slighly smaller that the original (34.18GB) but the old disks have 286MB Unallocated so there should be enough room - could this be the problem?

All three disks flash the left hand led at about 0.5s intervals

Any ideas would be much appreciated - the server runs MS 2003 Server with all latest patches, BIOS, Drivers, etc.

Thanks in advance

Tim Ray