A diamond is not a metal object
While David offers a great answer to making it work, I'm going to offer the other side of the Artisan's Blessed coin; I don't think this is the intended purpose. Magic has a component cost for a reason, and you're trying to abuse a class feature as a loophole to get around this.
You conduct an hour-long ritual that crafts a nonmagical item that must include some metal: a simple or martial weapon, a suit of armor, ten pieces of ammunition, a set of tools, or another metal object.
A diamond ring is not a weapon, a suit of armor, a set of tools or ammunition, so it must fall under 'another metal object'. If you are making a ring purely for the diamond contained within, you're not really making a metal object, are you? Once your DM allows you to create a cheap brass ring with an expensive 99.9 GP diamond in it, this feature essentially reads "you can create any mundane object costing less than 100 gp".
Need rope? "Yeah I'm making a grappling hook with 900 feet of rope, and then I'm cutting the hook off."
Need perfume? "Yeah I'm making a perfume bottle with perfume in it, with a metal stopper."
Need a chest? "Yeah I'm making a wooden chest with a metal lock on it."
While your DM obviously has the final say in all matters, and some DMs will allow this kind of thing, the feature says you can make a metal object, not "anything you want, with some cheap metal attached."
Want to store your diamonds? You can use your artisan's blessing feature to make rings worth no more than 100 GP out of metal with an opening, and then afterwards manually add an existing diamond to it.
Yes, there is a reason you can't do this
you must lay out metal, …, with a value equal to the creation
A new sword is worth 15gp (7.5gp used) and weighs 3 lbs - most of which is steel. That is the value of a longsword - what the ability is interested in is the value of the metal, not the value of any manufactured object the metal happens to be part of. How much is 3 lbs if steel worth? Say 1gp maximum. So this is an excellent way to lose value.
Best Answer
Artisan's Blessing handles rusted and mistreated weapons the same way it handles everything else - based on the worth of the raw materials they contain.
According to Artisan's blessing:
The spell isn't interested in the value of the items you lay out, it's interested in the value of the metal that they are manufactured from. This is not the same thing. For example (credit to Dale):
So, rusted weapons certainly won't be worth the item's full price, but they shouldn't even be worth the half price that you might normally get from an in-game vendor for a usable second hand weapon. A heavily rusted weapon is no use to anyone except someone that wants to make use of it's raw materials (ie. a Forge Cleric).
Exactly how much these raw materials are worth is going to be up to your DM.