The Mad Master in the wizard cave can be useful to farm small gems. Hill Giants are a popular source for small diamonds. And there are chests in The Mausoleum (and a few other places) that drop small diamonds.
I farmed a lot of them in Maze of Lamth. I use it for leveling (at lvl 8+). It's just perfect, it gives you a lot of money and different gems, also the single enemies make it easy to fight at lower levels.
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