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Traffic networks are one of the most critical infrastructures for any community. The increasing integration of smart and connected sensors in traffic networks provides researchers with unique opportunities to study the dynamics of this critical community infrastructure. Our focus in this paper is on the failure dynamics of traffic networks. By failure, we mean in this domain the hindrance of the normal operation of a traffic network due to cyber anomalies or physical incidents that cause cascaded congestion throughout the network. We are specifically interested in analyzing the cascade effects of traffic congestion caused by physical incidents, focusing on developing mechanisms to isolate and identify the source of a congestion. To analyze failure propagation, it is crucial to develop (a) monitors that can identify an anomaly and (b) a model to capture the dynamics of anomaly propagation. In this paper, we use real traffic data from Nashville, TN to demonstrate a novel anomaly detector and a Timed Failure Propagation Graph based diagnostics mechanism. Our novelty lies in the ability to capture the the spatial information and the interconnections of the traffic network as well as the use of recurrent neural network architectures to learn and predict the operation of a graph edge as a function of its immediate peers, including both incoming and outgoing branches. Our results show that our LSTM-based traffic-speed predictors attain an average mean squared error of 6.55 10−4 on predicting normalized traffic speed, while Gaussian Process Regression based predictors attain a much higher aver- age mean squared error of 1.78 10−2. We are also able to detect anomalies with high precision and recall, resulting in an AUC (Area Under Curve) of 0.8507 for the precision- recall curve. To study physical traffic incidents, we augment the real data with simulated data generated using SUMO, a traffic simulator. Finally, we analyzed the cascading effect of the congestion propagation by formulating the problem as a Timed Failure Propagation Graph, which led us in identifying the source of a failure/congestion accurately.