There's another element that I think is largely ignored in this often re-asked question.
Human beings (and perhaps especially pilots) have an incredibly strong tendency try to keep things operating normally, even when faced with significant evidence to the contrary. I could reel off any number of events where pilots facing abnormal operations due to failures/medical etc do not "declare emergency" in any way, nor even in some cases advise ATC that there is a problem.
The opinion of several here along the "better to have it and not need it than need it and not have it" line is good enough reasoning for me, but I add this: verbalising that you have an abnormal operation is one of the most effective ways of making sure that every crew member is thinking of it as abnormal. Crew members who remain in the mindset of "but it's not really that bad" at the start of a problem are substantially more likely to remain in that mindset long after the situation has progressed to be more serious.
I'm not advocating an alarmist approach that calls "Pan" for every caution or advisory, but whenever an abnormal requires me to fly differently, a clear unambiguous communication that the situation is not normal and requires urgency/attention is the best way of preventing crew and ATC from being drawn down the "it's not really that bad" mindset. "Pan" fits that bill.
Icarus (- 0.02c)