That's quite a nice range, I don't think there's anything to be ashamed of - my really good pro students end up with around about three octaves of comfortable voice, so I think you can congratulate yourself on the fact that you have almost two octaves comfortably without any great deal of training!
It's hard to advise you, though, without hearing you. I'll give you a couple of general tips based on what you said in your original message, please feel free to take them or leave them :
1) you can't feel or control your diaphragm. Don't worry about trying to use it consciously when singing, it's impossible.
2) breathing is only about ten percent of the equation in singing. How you take the breath in is more or less irrelevant, it's how you expell it that counts. As the only valve in the respiratory system is the vocal chords, any breathing exercises which do not take into account the role of the larynx are inherently flawed.
3) rather than worrying about how to breathe, think about how to support. Remember that support should be keeping the air back, rather than pushing it through. You support to avoid your body's desire to push the remaining air out of your lungs (it will eventually win, but you can try to hold it off as long as possible!). Your belly should not be tense when you sing, but the little muscle just under your sternum that sticks out when you cough should be, as should the waistband muscles and certain back muscles (this is where a good teacher will be really useful for you because these things are much more simple to get when someone is showing you!)
4) don't fixate yourself on your range - prefer quality over quantity. Higher isn't better or more impressive. So many people fixate themselves on high notes - if a singer were to sing an entire song and miss the high note, we'd probably forgive them - if the high note was the only one they got right, we'd just sit there and think 'shut up!' whilst they were singing the rest!
5) try some nice easy resonance exercises to get you back into the swing of things, on easy range scales, with the purest, cleanest tone you can muster. Sirening on 'NG' (as in siNG) would be great for this as long as you keep the volume really low.
6) bear in mind never to push - singing louder and singing higher both require less air, not more.
7) I think this is probably the best thing you could do : find yourself a great teacher who you get on with and respect and take a few lessons - you'd be amazed at how good teaching will help you progress at a rate of knots (a good way to judge it : if you don't feel a significant improvement in your voice by the end of the first session - you're in the wrong company). If you have talent, as your friends say you do, then you owe it to your voice to keep it in tip top condition so classes are a must. Maybe one of the teachers on the board could help out if they're near you?
8) Enjoy singing without getting over caught up in 'doing it right' - many students are afraid to sing without their teacher overseeing everything they do. This is unhealthy. Enjoy yourself and your voice, your teacher will put right anything you may have 'done wrong' quickly and efficiently.
Welcome back to singing anyway, you'll get loads of great advice from the other teachers on this board too.
Allan