1- no diffuser. Added Gaussian blur, radius 4 I think. It has that effect when you use pen tool or selection wand.
2- I like this shot - I don't usually do abstracts.
3- it's a tad underexposed but I tried bumping the levels up and it made the water look bad and the people looked like they needed contrast. I actually wish I'd hit the shutter 10 seconds earlier! my cam was packed and this was a rush shot.