If you are using SQL and are getting this error there is a simple fix.
The root cause is associated with SQL permissions.  It is a requirement that the Execute permission be granted because DIAGRAMS uses database stored procedures.

Here is an outline of how to set it.

Step 1 -  Browse to the Schema being used.

Using SSMS, go to Security->Schema->dbo (or your schema)

Step 2 - Setting Schema Properties

Double click on the schema, select the Permissions, then click the "View database permissions" link in blue:

Step 3 - Grant the Execute permission

Select the user for whom you want to change permissions, and look for the "Execute" permission under the "Explicit" tab.