Sounds to me like you were talking to a regular CSR masquerading as a diamond Desk CSR. Something similar happened to me. The CSR tells me,Sorry, there are no rooms available for points. I ask about a Diamond force and she acts like she doesn't know what I'm talking about. I ask to speak with a supervisor (evidently a true DD CSR) and within 5 minutes I have my reservation made using points.
Waiting 7 days to hear back sounds crazy to me. I'd try again and ask to speak to a supervisor.