1. It's really hard to summarize what she says or does in this essay.
2. The difficulties of reality that she uses as examples are interestingly related to Wittgenstein's examples in the Lecture on Ethics. They are these: a poem by Ted Hughes about a photograph of men who died (later) in the First World War, Coetzee's presentation of Elizabeth Costello's woundedness because of what we do to animals, the almost wrong impossibility of beauty and wonder at an act of kindness, and something like the experience of separateness from others. These examples are themselves hard to summarize or pin down, and it is no accident that Diamond uses references to literature, to "poetry, in a broad sense of the term," (p. 56) to help get her ideas across. They are not easy to articulate. It is not really clear whether the examples are poetry or experience, in fact. The first example is said to be "a poem" (p. 43). The second is complex but includes "a set of lectures" (p. 46). The third (after a section named "Deflection") is introduced simply as "Beauty and Goodness," and here the first example is described as involving (not being) a poem, and the second as involving "the horror of what we do to animals" (p. 60). So, as far as I can see, the examples involve a kind of mix or blurring or blending together of experiences and the poetry (in a broad sense) that captures or expresses these experiences. This is the kind of thing, I think, that the early Wittgenstein called nonsense. That name seems inadequate, but does have the virtue of making clear that it is hard to make sense of this stuff. Diamond's point, if she can be said to have just one, is that you could go mad thinking about these things. It might not all be nonsense, but it is far from being good, plain sense either.
Another aspect of her point (can a point have aspects?--one for each angel dancing on it, perhaps) is that there is a plain understanding of each example that is perfectly easy to understand: those men were alive when the picture was taken but now they are dead, Costello feels bad about the meat industry, some things are beautiful and some people are good, and some people are skeptical about other minds (or something like that). This understanding is often preferred by philosophers, makes the problems involved easy to solve or even invisible completely, and misses the point every time.
3. Diamond ends with a paragraph that might become famous for these sentences:
A language, a form of thought, cannot (we may be told) get things right or wrong, fit or fail to fit reality; it can only be more or less useful. What I want to end with is not exactly a response to that: it is to note how much that coming apart of thought and reality belongs to flesh and blood.The coming apart in question is the difficulty of reality, the seeming impossibility of thinking things we nevertheless experience. Diamond links this with skepticism, and hence philosophy, but also with poetry and with, not just human, but bodily (flesh and blood, which can mean both meat and real) existence. It might be tempting to say that philosophy is a problem for which poetry is the answer, but Diamond's work clearly belongs to philosophy and is hardly beside the point.
Finally, Peter Hacker says some interesting things about experience here. I quite like his response to the whole question of "What is it like to be a bat?" Elsewhere he has written that we do know what it is like: rather like what it is to be a mouse, only with wings and in-built sonar. This is a nice answer, but it isn't as friendly to wondering as it might be. Could a Ted Hughes accept this answer as the whole truth? And could a Hacker appreciate the poems of a Ted Hughes? If not then he is missing something.