Can You Solve this Ice Diamond Riddle? ft. Vsauce’s Michael Stevens

Riddle 2: At first I thought the water level would go up because the non-submerged part of the ice was not contributing to the water level. Once the entire ice cube melted, the water level would rise because the water has more mass. But maybe since the diamond is denser than the water and ice, it "pulls down" the ice cube and causes the water level to be increased initially. After the ice cube melts, the diamond  can no longer pull down on the cube so no extra water is displaced. The diamond will drop to the bottom, but the water it displaces is less than the what was initially displaced, so the water level drops. 

Riddle 1: could an insane magnus effect make it come back?