SpaceX released the following information this evening:
COTS 1, more detail
SpaceX engineers are analyzing two small cracks in the aft end of the 2nd stage engine nozzle extension. These cracks are in a region near the end of the nozzle extension where there is very little stress and so they would not cause a flight failure by themselves. However, further investigation is warranted to ensure that these cracks are not symptomatic of a more serious problem.
A decision on whether or not to attempt launch on Wednesday will be provided tomorrow evening.
The bell shaped Merlin Vacuum nozzle extension is made of niobium sheet alloy, measures 9 feet tall and 8 feet at the base diameter, and thins out to about twice the thickness of a soda can at the end. Although made of an exotic refractory alloy metal with a melting temperature high enough to boil steel, this component is geometrically the simplest part of the engine.
It is important to note that the niobium nozzle extension increases the efficiency of the Merlin engine in vacuum and is installed by default on all upper stage Merlin engines, but that efficiency increase is not required for this mission. The nozzle extension is most helpful when launching very heavy satellites or to maximize throw mass to distant destinations like Mars. The most likely path forward is that we will trim off the thinnest portion of the nozzle extension, which is where the cracks are located, perform a thorough systems check and resume launch preparation.