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Bill Diehl was commissioned a Second Lieutenant in the U.S. Air Force through the Air Force ROTC program at Oklahoma A&M College (now Oklahoma State University) and went on active duty beginning March 12, 1956. Lieutenant Diehl served as an Engineering Specialist with Headquarters Air Force Missile Test Center at Patrick AFB, Florida and then attended Missile Range Technician training at Patrick AFB. His next assignment was as a Chemical Engineer with Headquarters Air Force Systems Command at Andrews AFB, Maryland. Captain Diehl served as a flight examiner with the 1001st Operations Squadron at Andrews AFB, followed by F-105 Thunderchief Combat Crew Training. His next assignment was as an F-105 pilot with the 469th Tactical Fighter Squadron at Korat Royal Thai AFB, Thailand, from October 1967 until he was forced to eject over North Vietnam and was taken as a Prisoner of War on November 7, 1967.

Captain Diehl was reported to have died in captivity the next day, November 8, 1967, but his remains were not returned to the United States until March 6, 1974. Captain Diehl was officially listed as Missing in Action until February 1, 1973, during which time he had been promoted from Captain to Lieutenant Colonel.
- Distinguished Flying Cross (2)
- Prisoner of War Medal