So far, just a headline at the Wall Street Journal: “BP Suffers Setback in Installing Containment Dome” and merely a “Breaking News” listing. From its e-mail alert:

Hydrate build-up stalled placement of the containment dome over gushing oil. The BP executive of the dome said, “I would say it has failed.”

Scanning other news services; will update post haste.

Update 4:10 PM: Reuters has more senior execs denying the dire reports. Since initial reports said there was no oil leak, I’m not sure how much cred to give optimistic accounts:

BP engineers encountered flammable hydrate formations while lowering the four-story structure onto the leak, said Doug Suttles, the company’s chief operating officer.

BP Plc hit a snag in its efforts to lower a giant containment dome to trap oil from a blown-out Gulf of Mexico oil well on the sea floor that could take two days to troubleshoot, a BP executive said on Saturday.

CNN has more detail:

The effort to place a containment dome over a gushing wellhead was dealt a setback when a large volume of hydrates — crystals formed when gas combines with water — accumulated inside of the vessel, BP’s chief operating officer said Saturday.

Gas hydrates are lighter than water, and as a result, made the dome buoyant, Doug Suttles said. The crystals also blocked the top of the dome, which would prevent oil from being funneled to a drill ship.

The dome was moved off to the side of the wellhead and is resting on the seabed while crews work to overcome the challenge, Suttles said.

“What we had to do was pick the dome back up, set it over to the side while we evaluate what options we have to actually try to prevent the hydrate formation or find some other method to try to capture the flow,” he said…

The technique has never been tried at such a depth and there are no guarantees it will work, said BP, which holds the license for the well.

“It’s a technology first,” BP CEO Tony Hayward told CNN’s David Mattingly Friday. “It works in 3 [hundred] to 400 feet of water. But the pressures and temperatures are very different here. So we cannot be confident that it will work.”…

Casi Calloway, CEO of the environmental group Mobile Baykeeper, said Saturday she hopes the dome operation is successful, but she’s not counting on it…

BP hopes to connect the dome to a drill ship over the weekend and to begin sucking oil from the containment dome up to the ship by the beginning of next week, the company’s chief operating officer, Suttles said at a news conference Friday afternoon.

“This has not been done before and it will undoubtedly have some complications,” he added.

Like BP, the U.S. Coast Guard worked Friday to manage expectations about the success of the operation.

“This is going to take a few days and this is not going to be something instantaneous,” Coast Guard Rear Adm. Mary Landry said. “It may or may not work.”

On the surface of the Gulf of Mexico, the Coast Guard will continue its efforts to disperse and contain the massive oil slick, which has started to reach Louisiana’s outer islands. The Coast Guard performed four controlled burns, dropped 28,000 gallons of dispersant chemical and skimmed 8,000 barrels of an oil-water mix on Thursday, said Petty Officer Brandon Blackwell.

Calloway said the use of dispersants is also cause for concern.

“We don’t know what’s in it, we don’t know much about it,” she said.

“All it really does is sink the oil to the bottom and kind of get it out of sight. So the public doesn’t worry about it as much but the dispersant in itself is toxic,” Calloway said. “We don’t know what the half-life of it is, or how it changes the composition of oil. … We don’t know how long it stays in the water.”