Welcome to our forum.
hey riddler, This may sound silly, but I recently thought one of my diverters was not working, too. It turned out that I was only running one of the two pumps and when only that pump was running, this particular diverter was dead. Since it is a new tub, I was very upset......until I realized I was only running one of the two pumps. I fired up both pumps and all was well! Like I said, its a longshot, but I thought I would mention this....
Pull it straight up. 8-)
Chas may be right that the handle may be cracked underneath and when you are turning it maybe it's not actually turning the diverter but merely spinning on the stem.
Chas may be right?Sheesh. 8-)