what tests have you been for? a nerve conduction test might be useful. what it does is to send small electric currents through you to test if the nerves can respond. in my case, the nerve could respond to the electricity - i could see my ankle jerking upwards. if the nerve is completely damaged, then it would not respond to the electricity at all. there may be nerve damage and not nerve compression. that means that the nerve may be dead. but i am just doing guess work here.
anyway from what i know, i don’t know if diabetes can cause a foot drop, but i do know that having the condition can slow down the recovery time quite a bit. i was fortunate that i recovered quickly, perhaps due to the fact that i did my own physiotherapy (i walked on an elliptical machine daily and did strengthening exercises once i could flex it) and that i am young. those worked in my favour where diabetes did not. i wish you all the best, because i know it is a horrid condition to have.