1. [early 19C+] to cheat or swindle, to victimize, to ‘do’; ext. to diddle out of [? diddler, a swindler, fraud, itself f. Jeremy Diddler, the chief character in James Kenney’s farce Raising the Wind (1803) and ult. f. diddle v.1 or OE didrian, dydrian, to deceive, delude].
2. [early 19C; 20C+] to waste time; thus diddle away, to waste time [fig. use of SE diddle, to jerk from side to side, to quiver].
3. [mid-19C] to fail.
4. [20C+] to do for, to ruin, to kill.