The problem with your diamonds is that you are 'smoking' them. If
you look at them closely, you will see that it is not a problem with
reducing the grade but is a surface coating which is not removable.
This happens when enough heat is applied to a diamond that it turns
red. Diamonds can take quite a lot of heat as long as they are heated
as well as cooled slowly. Uneven heating to this red stage will also
cause internal shattering.
I have never tried casting in place but my guess is that: A) Your
gold is too hot. Seems to me that to avoid rapid heating, you must
have a very close tolerance between the temp of the mold and the
temp of the gold. And B) You are trying to use large diamonds. I find
that above say; 3 -3.5mm diamonds, they do not conduct heat evenly
enough to avoid this.