I find a lot of daimonds on Andoween. There are more daimond veins then titanium and gold veins! But you have to know where to look. I find most of them UNDER the lava level. Best is to tunnel 2 blocks above the mantle layer. For some reason the first 10 layers are mostly rock and not much lave pools (as opposed to Vulpto) so if you keep your wits up you should be ok. Daimond seems to spawn mostly near normal coal veins and iron veins.
I tunnel with daimond hammers since you can dig out 3 by 3 tunnels that way, but an emerald hammer should work fine as well. For digging out gems i think you need to have at least gold hammers so i suggest getting at least to that before venturing out. Titanium hammers would be better i guess. I find about 80 daimonds before my daimond or emerald hammer worns out so i am building up a steady pile of daimond tools now.