Diamonds are uncommon throughout the bedrock level, and are typically found near bodies of lava.
Lava layer is around 12-14
Lava can be found anywhere beneath sea level. Lava has been know to spawn on the surface in pools, though this is rare. However, lava seems to be much more common as you get closer to bedrock.
Yes on level 13 or lower but be careful because lava is on level 10
Mostly, they can be found next to lava.
Diamonds are most commonly found at level 12 - the same level lava is found at in large amounts. To tell what level you are at press F3. In the upper left you will see X, Y, and Z coordinates. This marks your location in the world. Y is your current depth.
Diamond is usually found around lava flows.
The whole world is 256 blocks high. Level 0 is filled with bedrock. Sea level is 64. You can't build anything above level 255 (Except beds, water, and lava).
You can find lava underground.
Obsidian is usually found in caves underground where flowing water hits still lava.
Yes, bedrock will block lava.
diamond can usually be found in or around lava, making it very risky to mine. however, full iron armor completely protects you from lava, meaning you can swim in it as if it were water (note: this doesn't work on peaceful)