Is it possible that diamond can be grown from aqueous solutions? Assume a cubic diamond crystal with hydrogen-terminated surface bonds. The terminating hydrogen atoms will form pairs that are geometrically close together in alternating diagonal pairs (think of the rectangles on corrugated walking steel).

Next, picture a formaldehyde molecule being pushed oxygen-first into one of these terminating hydrogen pairs. If the oxygen atom can be made to react with the hydrogen pair, a water molecule would be expelled and the remaining $\ce{CH2}$ group would presumably bond to the two bonds of the diamond lattice.

If you repeat this process over the entire cubic face, the result will be a new layer of diamond that is terminated with the same paired hydrogen atoms as the original layer. The entire layer-growth process thus in principle could be repeated indefinitely, resulting in a diamond grown at or near room temperature from an aqueous or other low-temperature solution.

Question: Can anyone think of a fundamental reason why the above process, or some variant of it, could not be used to grow diamond crystals at room temperature? (A "variant" might start with carbohydrate units larger than $\ce{OCH2}$, for example.)

One or more geometrically sophisticated catalyst molecules would be required. Each catalyst molecule would snag, carry, and orient a formaldehyde molecules onto some part of the textured surfaces provided by the cubic diamond face, such as the face itself or along a growth edge.

I did this a long time ago in high school, but my recollection is that the reaction should be mildly exothermic. But even if it is not, energy-source molecules (think of the role of ATP in living systems) could provide energy to enable an endothermic reaction.

So... thoughts, anyone? Is there any deep reason why this approach to room-temperature or near-room-temperature diamond synthesis is clearly not possible?
The reaction you propose would be formally equivalent to the protection of aldehydes with 1,3-propanedithiol to form the correspondent dithiane. There are many organic reactions in which aldehydes participate this way, but all of them have something in common: the other species(lets call it donor) must have a free pair of electrons to attack the carbon atom in the aldehyde. In case this pair is not present, but the donor has an acidic hydrogen, we could use a strong base to remove it and form in situ the pair of electrons. (See aldol reactions)

Here's the problem: diamonds have no free pairs of electrons. And terminal hydrogens in a diamond lattice are by no means acidic, hence can't be removed by any base to the best of my knowledge. So there's no way a diamond will react with aldehydes.