Can creatures move diagonally through walls?

Solution 1:

To answer your first question, yes, all creatures can move diagonally.

Your underlying problem is with the order of the designations. Dwarves operate on a Last in First Out system (LIFO) which means that for squares, if you, intuitively, mark all four walls at once, you'll get one corner (if you went clockwise) or a variable amount (if you went horizontal -> vertical or vice versa) that can still be less then four.

Once this has happened, you must deconstruct walls to reach the corners, as construction can't happen diagonally.

Prevention of this is actually pretty easy as long as you're aware of it: simply build corners first, either by not assigning other construction jobs until the corners are complete, or by suspending one or more adjacent wall constructions until the corners are complete, then unsuspending them.

Solution 2:

Things that can move/be done diagonally:

• Water
• Creatures
• Digging
• Deconstruction of buildings

Things that can not move/be done diagonally:

• Miasma
• Construction
• Structural Integrity

This is not a comprehensive list.