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Are you sure you enter correct code? IF yes maybe your phones need to be reset. Try to call your network provider and asking him about HTC Touch Diamond P3700 unlock code, don't forget to explain your situation and you need needs 1-2 weeks before you get that code and it takes a charge. Or you can try buy instant HTC unlock code from third party sites with lower price and more quick turnable.
you can try to recalibrate the touch screen to see if that works,
Start> settings> display> calibrate
* since screen is not working you will have to go the long away and use buttons on phone and nav wheel to get to these options
Go to HTC's website and go to support and select htc touch diamond (make sure its 'diamond' and not 'htc touch'!) and see if there are any rom updates (in english). Make sure it is for your phone + carrier/cell provider, as sometimes there are different rom versions, for different carriers. (depends on your country, so change the country)
Its because of the touch sensitive navigation pad (the thing that has the up down left right enter/ok controls). The 'rim' or circle of the 4-way pad is touch sensitive and is used to zoom in and out in messages browser and pictures. If it zooms in and out by it self for a few seconds after a call, then its just lag from the multiple times it touched your face, or it could be a problem with the touch sensor (if it takes much longer), in which case you would have to get the phone replaced if its still under warranty, or to the store you bought it if you still can.