I've seen this done with a full (bottom) layer of fondant, then the diamonds set on top. For my first attempt, I would consider doing a very light guideline in the bottom fondant where each diamond touches so you can lay them perfectly. Use a ruler and an embosser. Not sure it would work, but worth a try on a practice piece.
I've done the lay on look before, and plan on using it has a last resort, but I really am looking for info on how to get that nice flush look. Thanks for all help.
To make them flush, you will need to use a diamond shaped cookie cutter to cut out the fondant pieces, and then place them on the cake in the same patter as shown on the cake. Kind of like a puzzle.