The Diamond is located in the Artifact Room. Grab it and toss it in the device in the center of the Artifact Room and put in the key. Then turn the key and go to the hole on the left, on the top or the right hole. The hole on the left activates the secret level Young Indy. The hole on the right activates the secret Warehouse level. The hole on the top activates the secret Ancient City level. Only Young Indy is available after you insert both the diamond and the key. The others must have all Artifacts excluding The Well of Souls.