To cheat. To defraud. The cull diddled me out of my dearee; the fellow robbed me of my sweetheart. See Jeremy Diddler In Raising The Wind.
Definition taken from The 1811 Dictionary of the Vulgar Tongue, originally by Francis Grose.
Dickey-1 * DiddeysNathan Bailey's 1736 Dictionary of canting and thieving slang
John S. Farmer's collection of canting songs and slang rhymes