hey dude, if this is still an issue:
you should set up 256 colors not for diablo II.exe, but for Game.exe. And run the game via game.exe. Also, there's neither need for compatibility mode nor run as admin mode.
there are some color glitches in game menus, but the game itself runs fine
it works fine for me, try
also, if this doesn't help - u may try glide wrapper: http://www.svenswrapper.de/english/index.html