The paper deals with the development of a model-based current-signature algorithm for the detection and isolation of power switch faults in three-phase Permanent Magnet Synchronous Motors (PMSMs). The algorithm, by elaborating the motor currents feedbacks, reconstructs the current phasor trajectories in the Clarke plane through elliptical fittings, up to detecting and isolating the fault depending on the characteristics of the signature deviation from the nominal one. As a rough approximation, as typically proposed in the literature, the fault of one out of six power switches implies that, at constant speed operation, the phasor trajectory deviates from the nominal circular path up to a semi-circular “D-shape” signature, the inclination of which depends on the failed converter leg. However, this evolution can significantly deviate in practical cases, due to the dynamics related to the transition of motor phase connections from failed to active switches. The study demonstrates that an online ellipse fitting of the current signature can be effective for diagnosis, through correlating the ellipse centre to the location of the failed switch. The performances of the proposed monitoring technique are here assessed via the nonlinear simulation of a PMSM employed for the propulsion of a lightweight fixed-wing Unmanned Aerial Vehicle (UAV), by quantifying the fault latencies and the related transients.