Are you following these individual steps?
A manual rebuild is used to rebuild failed drives. The CU allows manual rebuild for an individual drive. Perform the following steps to rebuild a drive:
Step 1.Select Rebuild from the CU Management Menu.
The CU displays a device selection window that marks the failed drives with FAIL indicators.
Step 2.Press the arrow keys to highlight the drive to be rebuilt.
Step 3.Press the spacebar to select the highlighted physical drive for rebuild.
Step 4.After selecting the physical drive, press <F10> and select Yes at the confirmation prompt.
The indicators for the selected drive changes to REBLD.
Step 5.When rebuild is complete, press any key to continue.
Step 6.Press <Esc> to display the Management Menu.
I got this from the user guide at http://www.intel.com/support/motherboards/server/sb/cs-016550.htm
The rebuild tab is grayed out. I get a message that there are no logical drives selected. I took the failed drive out and replaced it with an identical new drive. If I bypass the message that the array is degraded the system boots fine. I need to re establish the mirror but not sure how to recreate the logical drive without losing the data on the good drive.
Are you attempting the rebuild from the RAID BIOS console (ctrl-c) or RAID Web Console (operating system version)? You should be using the RAID BIOS console. You'll need to identify the physical disk that has the data you want to keep and rebuild from that one to the new one you installed.