To work around this problem I patched po/Makefile.in.
The line:
GETTEXT_PACKAGE =
was changed to:
GETTEXT_PACKAGE = dia
Hmmm...
-Vance
> gmake[2]: Entering directory `/usr/home/vances/dia'
> (cd po ; gmake dia.pot)
> gmake[3]: Entering directory `/usr/home/vances/dia/po'
> gmake[3]: *** No rule to make target `dia.pot'. Stop.