Parallax will chop the top 1.5 inches off your subject. If you are chopping more than that - and if the entire head is missing it sounds as if you are - then the culprit is most likely a cock-eyed viewfinder. It is also a possibility that the lens was crooked -- the "focusing helical" in a Diana is often pretty loose.
But this is supposed to be part of the Diana's "charm" - you never know what's going to go wrong next. One can imagine a gallery show of wedding pictures with all of the people with their heads missing...
See if any of the plastic bits around the viewfinder look like they got melted when the camera came out of the mold. Try putting a sliver of black tape over the top of the front viewfinder window so the view through the finder is the same as the view through the lens.
This really shouldn't be any mystery, the Diana achieved it's cult status by being one of the worst cameras made. My vote for the worst is the Empire Baby, a camera that makes the Diana look like a Rollei.