You need to check that the necesary CAID is installed on the Cam, you can do this using Fausto, a software utility for the Diablo Cam.
Also ensure you have inserted the card the correct way up for the Diablo Cam, it should be inserted with the chip facing upwards.
You can also play around with the Configuration settings by going into the cams menu and adjusting the CAID options and ensuring that Emulators priority is set to 1 Card 2 Emu.