Diamond now practical for use as a structural member in rocket engines?

Ok quick facts:

1) >millimeter thicknesses of polycrystalline diamond are commercially
available (cost from $0.35-2.66/mm^3 [Ref 2]) in fairly arbitary
shapes

2) diamond has amazing thermal conductivity (10 W cm-1 K-1 [ref 1])

3) diamond has amazing tensile strength (>1.2 GPa)

4) diamond has an amazing melting point (>4000C)

5) diamond has amazing strength/weight ratios

6) diamond has very low thermal expansion ratios and excellent
resistance to thermal shock

Basically on paper it is a rocket nozzle material
from heaven.

Back of the envelope calculations show that a 2
foot diameter 1mm thick diamond shell can take
1000 psi tensile, and a lot more than that under
compression without cracking, so it's easily in the
ballpark for combustion chambers and nozzles already.
The cost would only be a few hundred dollars in
production quantities.

ISP is closely related to temperature, and pressure. If
diamond can't improve both of these metrics and improve the
performance of rocket engines I will be very surprised.
Would diamond allow SSTO with decent payload? Maybe.

Most diamonds are grown as a flat sheet, but that's not
necessarily the case [ref3], spherical, cylindrical and
other shapes appear quite possible; and arbitrary sizes
as well.

One issue with diamond is that it tends to turn into
graphite at high temperatures (greater than 707 C);
presumably this is mainly a surface effect, but it
clearly is a concern.

Still, it may well be practical anyway, it depends
on how long it takes to convert- anyway graphite
supported by diamond should be pretty amazing.

This must have been looked at seriously somewhere,
although I couldn't find much on the web, there
were a few references to films. Comments welcome,
are we close to a breakthrough point in space
launch technology now?

References:
1. http://www.me.berkeley.edu/diamond/submissions/diam_intro/diamprop.htm
2. http://www.p1diamond.com/product.html#film
3. http://www.mrs.org/publications/jmr/jmra/1998/apr/031.pdf

(I'm not associated with p1diamond in any way)