I am by NO means a KGC expert. However, I am a quick learner and have studied a lot and asked SEVERAL questions since I found a hot KGC area last year and, what I believe to be some kind of a rock "vault". My "guess" would be that the diamond inside a circle means that "something" is inside a "circle". This might be a cache located inside a circular formation of rocks/trees or something similar. Also, you might even want to make a grid of the area from a topo map, as the circle you are looking for might be rather large and consist of landmarks in the area.
Again, I am by no means a KGC expert. However, this is how I would pursue the sign. I would start looking for other markers in the immediate area and see if they form a circle (a small one visible while in the field). If not, then I would map out all of the markers found on a topo and see if they form a larger circle. A lot of times, the markers forming the circle will have "lines" extending (maybe a pile of rocks or other markings). I would map these out (whether on a large or small scale) and search in the center of the circle of markers where these "lines" intersect. I have also heard that many of these KGC sites have smaller caches on or near the points on the outside of the circle (and usually a larger cache in the center, where these lines from the markers intersect).
This is only a "guess" on my part and how I would proceed. The truth may be much different however, as these KGC sites are really complicated and can stretch for miles. Good luck with your area/search!

It seems that you two are very close to something nice!