WITH UNRELIABLE RWY 27 DME SIGNAL; B737-300 FLC BEGAN DSCNT EARLY RESULTING IN A LOW ALT ALERT AND ENSUING MISSED APCH AT SAN; LINDBERGH FIELD.

Narrative

SAN RWY 27 LOC DME HAD BEEN NOTAMED OTS SEVERAL HRS EARLIER; HOWEVER; APPEARED TO BE BACK UP AND WORKING FINE. SOCAL APCH VECTORED US FOR THE LOC 27 APCH AND MENTIONED THE DME IS OTS. SINCE IT WAS UP AND WORKING; I ASSUMED HE DIDN'T KNOW IT WAS BACK UP. THE FO'S NAV CTL HEAD WE DISCOVERED WAS STUCK IN THE NAV/IRS POS AND HE COULD NOT SELECT A VOR OR LOC FREQ. DURING THE LOC 27 APCH I USED THE DME TO IDENT THE LETDOWN FIXES VYDDA; SWATT; AND REEBO. AT APPROX 5 DME AT APPROX 1500 FT MSL; SOCAL APCH SAID THEY WERE RECEIVING A LOW LEVEL OR LOW ALT ALERT ON US. WE IMMEDIATELY BEGAN A CLB AND ANNOUNCED A MISSED APCH. ON THE SECOND APCH; SOCAL APCH USED THE WORDS 'DME UNRELIABLE' WHICH HAS A WHOLE DIFFERENT MEANING. WE THEN USED FMC POS TO IDENT THE LETDOWN FIXES AND ALL WENT WELL. AS IT TURNS OUT THE DME WAS IN ERROR ABOUT 2 MI. HAD THE CTLR USED THE WORD 'UNRELIABLE' INSTEAD OF 'OTS' WE WOULD NEVER HAVE USED IT. THE DME INDICATED ACCURATELY AT VYDDA AND SWATT. DUE TO THE DME ERROR WE HAD STARTED OUR DSCNT TO MDA PRIOR TO REEBO. WE LEARNED TO CONSIDER OTS AND UNRELIABLE AS ONE AND THE SAME. WITH THE FO'S VOR RECEIVER CTL HEAD STUCK IN LNAV; WE COULD NOT USE THE XRADIALS FROM POGGI TO IDENT THE FIXES VYDDA; SWATT; AND REEBO. WE DIDN'T DISCOVER THE CTL HEAD PROB UNTIL WE WERE INBOUND ON THE RWY 27 LOC AND THE FO MOVED HIS SELECTOR SWITCH FROM NAV TO VOR ILS.