Abstract-State estimation plays an essential role in the monitoring and supervision of power systems. In today's power systems state estimation is typically done in a centralized or in a hierarchical way, but as power systems will be increasingly interconnected in the future smart grid, distributed state estimation will become an important alternative to centralized and hierarchical solutions. As the future smart grid may rely on distributed state estimation, it is essential to understand the potential vulnerabilities that distributed state estimation may have. In this paper, we show that an attacker that compromises the communication infrastructure of a single control center in an interconnected power system can successfully perform a denial of service attack against state-of-the-art distributed state estimation, and consequently it can blind the system operators of every region. As a solution to mitigate such a denial of service attack, we propose a fully distributed algorithm for attack detection. Furthermore, we propose a fully distributed algorithm that identifies the most likely attack location based on the individual regions' beliefs about the attack location, isolates the identified region, and then reruns the distributed state estimation. We validate the proposed algorithms on the IEEE 118 bus benchmark power system.