UPDATE 3-US Democratic Senator Daniel Inouye of Hawaii dead at 88

* War hero lost arm in World War Two combat * Death not expected to alter Democrats' control of Senate * Served on Watergate committee, investigated Iran-Contraaffair WASHINGTON, Dec 17 (Reuters) - U.S. Democratic SenatorDaniel Inouye, a decorated World War Two veteran who lost an armin battle and represented Hawaii in Congress since its statehoodmore than a half century ago, died on Monday at