There's a couple of places where you can find a diamond in chapter 1:
- Ophala - Moonstone Mask (apparently as a reward when you have collected all the items, but may require persuasion)
- Underneath the seedy tavern (Bloodsailor Hideout) inside a chest after you face a rather tough Bloodsailer lieutenant! The chest is a boss chest which will contain random stuff but also a diamond. It will most likely be locked and heavily trapped so beware!
The second option is probably your best bet since persuasion might not work (especially considering a lawful good paladin shouldn't really be doing the Moonstone mask quest anyway
). You might get lucky and find a diamond as random loot however...