figured out the stitch for diamond lace by screwing up on rows 15 through 19, then trying to fix it and failing, undoing it, writing it out, and finally getting it right last night. Here are my rough notes, I will fix them up when I get home and can read my correct notes
The basic theory is that you enter and exit the diamond in certain ways. Entering is done with k2tog (to decorate the edge and to make up for the stitch you are about to add) then yf (for the hole in the diamond pattern). Exiting is yf (the hole) then ss k psso (for the decorative edge and to make up for the added stitch.
The tricky bit is the rows with just one hole (start and stop of diamond, rows 1 and 9 if I remember right—1 has one hole, 3 has two holes, 5 has two holes farthest apart, 7 has two holes, 9 has one hole) are done with the exiting pattern, that is, yf ss k psso, not the k2tog yf pattern. And to reduce the 3 knit stitches in the middle of the diamond to one stitch in the next row (surrounded by holes) you have to both psso and k2tog, so you do yf (hole) ss k2tog psso (one stitch from three) yf (second hole).
The first go around I didn’t know what the stitches were doing, and just blindly tried to adjust a straight knitting pattern to knitting in the round. Now I get what the stitches are doing in the finished work, it makes sense and I can see what really needs to be done. I guess I am a knitting engineer now, not a slave to the directions. Not a knitting scientist, however.
I will post the correct pattern tonight when I can read my notes and get it right.