Is there really a hot spare bound? It should say it is a hot spare in Navi. Is it in the right slot? In fibre Clariion. The hot spare must be in slot 9 (the right most disk) of the DPE. Disks 0 thru 8 are vault disks and must be installed.
There are some issues with some versions of flare that can cause hot spare problems. Go to Navi, right click on the sp, select properties and get the model and code levels. Let me know what they are and I'll see what i can find out.
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Just to clear up terminology a bit.. DAE is an expansion chassis and has no storage processors installed. DPE is the enclosure that contains the storage processors. It is the DPE that defines what type of Clariion you have.
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Is there some reason you are not replacing the failed drive?
It will rebuild when it is replaced with or without the hot spare unless the raid group has more than one fault.