(Adds details on dangerous gas line connection)

By Barbara Goldberg

NEW YORK, March 28 (Reuters) - Utility workers dispatched in August to one of three buildings destroyed in an explosion and fire in Manhattan last week found dangerous gas line connections that created a "hazardous situation," a Con Edison spokesman said on Saturday.

The crew was sent to the building after a Con Edison worker reading gas meters smelled gas on Aug. 6 in the basement, said Con Edison spokesman Allan Drury.

The basement could hold the key to the cause of the devastation, in which 22 people were injured - four critically - and two people remained unaccounted for, police said.

New York Mayor Bill de Blasio said on Friday that the blast was possibly tied to someone "inappropriately" tapping into a gas line.

The owner of the sushi restaurant where the explosion occurred told The New York Times that utility workers determined that gas intended for his restaurant was being siphoned off illegally for use in newly renovated apartments upstairs.

Drury said that utility workers found multiple leaks on Aug. 6 in hoses that had been connected to the gas line leading to a restaurant in the building, creating a "hazardous situation." He noted that Con Edison shut off the building's gas for about 10 days, until it was determined to be safe.

On Saturday, rescue crews with cadaver dogs clawed through smoldering rubble in the search for two people still unaccounted for. Authorities said it could take a week of careful digging through twisted debris, bricks and splintered wood before the basement is reached.

In all 11 buildings were evacuated, leaving residents of 144 apartments needing places to stay. Con-Ed said they may return to their homes as soon as Sunday.

Investigators were looking into whether gas and plumbing work being done privately in one building led to the explosion.

An hour before the blast Con Edison utility inspectors had been at the scene and determined that pre-existing work was not satisfactory, but the problems were not safety related, the mayor said.

The contractor, identified as Dilber Kukic, was one of 50 people arrested in February in a sweep of the city by building and housing inspectors. He was accused of bribing an undercover investigator to dismiss violations at two properties, the Manhattan District Attorney's office said. The hospitalized Kukic could not be reached for comment.

(Additional reporting by Eric M. Johnson in Seattle; Editing by Scott Malone, Greg Mahlich, Chris Michaud and Michael Perry)