Green’s Dictionary of Slang

1. the height of fashion (cited use is perhaps ironic).

1791

W. Reeve ‘Tippy Bob’ song in Bluebeard [pantomime] But it’s the tippy,— the go, — the diddle, — the wish.

2. a swindle.

1866		Letters by an Odd Boy 123: One fellow, a great big hearty chap, who had no business to die — whose decease I am inclined to regard as a diddle and a do.
1880		Bulletin (Sydney) 13 Nov. 1/1: [headline] The Dissolution Diddle.
1885		Punch 5 Sept. 110: And something whispered me – in diction chaste – It’s all a diddle! [F&H].
1890–1904		Farmer & Henley Sl. and Its Analogues.
1926		Breton & Bevir Adventures of Mrs. May 10: ‘It’s a proper diddle,’ I said.
1959		M. Richler Apprenticeship of Duddy Kravitz (1964) 264: A diddle with an insurance agent.
1966		C. Wood Fill the Stage With Happy Hours (1967) Act VII: A bob or two a week is all he can fiddle on that fiddle diddle.