A very cool project. I would suggest trying to locate a copy of the book "The young miller and millwright's guide", by Oliver Evans. It was originally published in the late 1700's, but has been reprinted many times since. Evans was THE authority on water wheels, and their succesful application in grist mills. And a superb engineer for his time.
I have a copy, but it's currently on loan to a relative. Try Ebay, and online used book stores. Beware, the older prints are pricey, try to find a recent version.
I like your idea of the diaphragm pumps, what about using bigger (20 x10.00x10) lawnmower tires? they are usually 2 ply, which makes them quite flexible. I am envisioning a walking beam type of arrangement, with a pump on each end, allowing for a more constant flow of water.
Not to mention the coolness factor, of watching all the moving parts...
