The musical "Dreamgirls" was unexpectedly shut out for Best Picture when the Academy Award nominations were announced Tuesday morning, but came away with a leading eight nominations.

The multinational drama "Babel" was close behind with seven nominations, including Best Picture and Best Supporting Actress honours for relative newcomers Adriana Barraza and Rinko Kikuchi.

The other films selected to face off for Best Picture were "The Departed," "Letters from Iwo Jima," "Little Miss Sunshine," and "The Queen."

Four Canadians scored key nominations: Ryan Gosling for his lead acting role in "Half Nelson," Paul Haggis for screenwriting on "Letters From Iwo Jima" and Deepa Mehta for her foreign film submission, "Water." "The Danish Poet," co-produced by the National Film Board, was nominated for best animated short film.

The other nominees for best actor were: Leonardo DiCaprio for "Blood Diamond,'' Peter O'Toole for "Venus,'' Will Smith for "The Pursuit of Happyness,'' and Forest Whitaker for "The Last King of Scotland.''

Film critic Richard Horgan told CTV's Canada AM from California that he's stunned that "Dreamgirls", which launched a multimillion-dollar marketing campaign ahead of the nominations, wasn't a choice for Best Picture.

"Down here in Hollywood, I can tell you that the chatter for months among certain pundits has been that Dreamgirls was going to get 10 nominations or get the Best Picture. So that is a big surprise."

The musical, based loosely on the story of the Motown group The Supremes, also garnered a Best Supporting Actress for American Idol runner-up Jennifer Hudson, and a Best Supporting Actor nod for Eddie Murphy. Three more of its nominations came in a single category -- for original song.

Horgan was pleased to see that "Little Miss Sunshine," which debuted last January at the Sundance Film Festival, was able to maintain enough momentum to snag a few Oscar nods, including Best Supporting Actor for Alan Arkin and Best Supporting Actress for child actor Abigail Breslin.

"It's a triumph for a film that was purchased this time last year for about $12 million and is now the most successful Sundance film," he said.

Canada AM film critic Richard Crouse added it was particularly noteworthy because the film is a comedy.

"Comedies don't traditionally do particularly well at the Academy Awards," Crouse said. "Six months ago, everyone was talking about the dark horse, this is going to be the dark horse. Here it is."

Martin Scorcese earned his seventh Oscar nomination, this time for "The Departed."

He'll be competing against Alejandro Gonzalez Inarritu for "Babel'', Stephen Frears for "The Queen'', Paul Greengrass for "United 93'' and -- most notably -- Clint Eastwood for "Letters From Iwo Jima.''

Scorsese, who has never won an Academy Award, could stand a chance this year, CTV's etalk gossip blogger Elaine (Lainey) Liu said. But it's up to Eastwood.

"If Clint Eastwood is willing to step aside and give Martin his due, then he will win this year," Liu said.

Eastwood took the Oscar for Best Director in 2005 for "Million Dollar Baby" over Scorsese's "The Aviator."

Meryl Streep padded out her record as the most-nominated actor ever, earning a Best Actress nomination for her role as the boss from hell in "The Devil Wears Prada." It was the two-time winner's 14th nomination.

Joining Streep as Best Actress nominees were Penelope Cruz in "Volver'', Judi Dench in "Notes on a Scandal'', Kate Winslet in "Little Children'' and Helen Mirren in "The Queen."

Winners of the 79th annual Academy Awards will be announced Feb. 25 in Los Angeles, live on CTV.