An ass that’s so tight if you stuck a piece of coal up there you’d have a diamond in a week.

May reference just an incredible, tight, sweet ass. Or, may reference someone that is an uptight fucker.

A shit so hard, that it tears the ass on the way out, leaveing his/her under-garments stained red.

During the act of anal sex the compressing of the penis against feces occurs. The excrement then becomes compacted into a hardened "Ass Diamond".