Ahh, the penny drops finally, I am with you now... it never occured to me that the Diplomat and his small entourage could be the main force and that you could then add a much larger force of allies !
e.g. Loranti and 100pts of Empire with 500pts of Casanii or Loranti and 500pts of Empire with 100pts of Casanii.
That is some clever lateral thinking... and very sneaky.
However, this does mean that some rules lawyer is bound to want to play an Empire force consisting of just Loranti and Danakan and then 500pts each of Casanii and Delgon allies... which just doesn't feel right to me !
I feel the proposed change to Diplomat is too open ended, as it is trying let a model do two things. i.e. let it be part of another force as an ally and let it have allies in it's force, I just don't know how you could word it to close all the loop holes.
In summary, I still think that having two abilities would be the easiest solution.