After some digging, I have found the problem. 0.61 puts the menu in a div called #globalnav. When you enable the sandbox skins (which you want to do for diurnal, since it relies on them for positioning), it switches off #globalnav. If that was in the CSS it would be fine, we could just overrule it, but no, it actually seems to stop the html being generated.
What you could try is switching the skins off by selecting 'no stylesheet', then copy and paste the 3col-right skin CSS into your custom CSS box (here it is, it's not very long):
margin: 0 400px 0 0;
margin: 0 0 0 -400px;
margin: 0 0 0 -200px;
and then pasting the Diurnal stylesheets in after it. It may still require tweaking, because the menu code is slightly different.
I can see both Sandbox 0.97 and 1.0 in the wp.com repository (not that this necessarily means anything as there are a whole bunch of themes there which have never seen the light of day) but the version in my presentation panel is still 0.61. The upgrade membracid mentions seems to have been merely adding tags to 0.61, not upgrading to a current version. I'm sending a feedback to ask what the status is on this.