UPDATE 1-Canadian isotope reactor down at least three months

*Source of leak found, but testing continues

*Three month shutdown a preliminary estimate

*Hospitals scrambling for new isotope supplies

(Updates, adds details)

By Allan Dowd

VANCOUVER, British Columbia, May 27 (Reuters) - An aging Canadian nuclear reactor that produces much of the world's medical isotope supply is expected to be out of operation for at least three months, officials said on Wednesday.

Crews have found the source of a heavy water leak at the Chalk River reactor in eastern Ontario, but more inspections will be needed before a repair plan can be worked out, Atomic Energy of Canada Ltd. said.

"Based on our preliminary findings to date, we now believe that the NRU reactor will be out of service for at least three months," AECL Chief Nuclear Officer Bill Pilkington said in a news release.

AECL said it cannot give an exact prediction on how long the facility will be down until the inspection is completed. The government-owned firm had previously estimated it would be out of operation for at least a month.