My guess is you tried it single ended. Feed it some power with a balanced 4 pin connector and the heavens will sing. The Diana Phi also uses the same drivers as the 1266 so..... not understanding why you'd like the 1266 over the Diana unless you prefer the 2 telephone pole suspension bridge setup.
The diana phi does sound great with more detail and more even response than the 4z. Having had the diana phi for an extended period as well as the 4z I can say that they sound different the 4z is a warmer headphone.
In regards to the 1266 vs the diana phi. I went up from the diana phi to the 1266 phi tc. The tc is a better headphone by a good margin. The sound stage is much more expansive and almost speaker like. The imaging is much more precise as well. The 1266 tc is a faster headphone on or above the level of the stax sr009s. The 1266 tc also has deeper and more visceral bass with a better midrange presentation than the diana phi. I borrowed a pair yesterday thinking that I might be able to live with them instead of the 1266 but the difference is to big. There is no way to unheard the difference between the two.
The 1266 is also more comfortable for me once the fit is dialed in. They also are great for me and others that wear glasses. Just make sure they don't seal completely on your head.