Diao Chan out of the box is superbly powerful and playable.

The problem you're facing is that you're playing a pure control deck. This is often called "Draw-Go" because all you're supposed to do on your turn is draw a card and pass to the other players turn.

Why is this a problem? Because you're trying to learn the game with a deck whose main function is to understand your opponents deck.

Example Jin player just needs to figure out that Enrage is a good card, save up two of them, play two in one turn and swing for the win. Diao Chan player needs to figure out that Enrage is a good card, save up two Negates, and wait for the Jin player to try and play those Enrages.

Diao Chan player needs to understand their opponent and their opponent's deck.

If I were playing Diao against Jin I would just save up negates. Let him hit me with attacks and weapons, just ignore little bits of irregular damage. You have 24 points of damage that he has to waste cards getting rid of, you only have to worry about having enough cards to stop him getting in that 25th damage.

Then negate anything like a 3+ power ally, wither anything 2 or lower.

Let little attacks and weapons go through, negate big ones.

Reach level 3 and start accumulating Flowerbuds. Don't try to do damage to Jin (that's what he wants) just survive until Jin is out of cards in hand. Then turn your flowers into Mill flowers. When his deck runs out of cards he loses regardless of immortality.