Egelstaff trailed 12-9 in the opening game but turned it round to lead 17-14. Diehl took four points in a row to go ahead again 18-17 but Egelstaff mastered her notorious hometown nerves to win the game with a four-point burst. In the second game she opened up a 7-3 lead and never looked back.
Egelstaff said: "I feel great. This is my best performance of the tournament. In fact, the best performance of my career. Ella Diehl is a world-class player and has a higher ranking."
"I got really nervy at the end trying to close it out but I have played enough matches now to handle it."
But there was disappointment for Emma Mason as she and defending champion Mariana Agathangelou lost their women's doubles final against top seeds Valeria Sorokina and Nina Vislova of Russia 21-16 21-16. It was the third time the Russian pair had won the title.
But the Edinburgh-born Glasgow based player at least had the consolation of receiving the Robert McCoig Memorial Award from BADMINTONscotland Patron HRH The Earl of Wessex, KG, KCVO, for the most meritorious performance in the Championships.
Emma said: "I am disappointed because we couldn't play at the same level as we did yesterday in the quarter-finals and semi-finals but for the tournament I have got to be happy. We beat the No 15 pair in the world.
About the Robert McCoig Trophy she said: "It's great to win the trophy after a long comeback, having snapped my Achilles a year and a half ago. To be rewarded on home soil is great.
The men's singles title went to Germany's top seed Marc Zwiebler, who defeated fourth seed Peter Mikkelsen of Denmark 21-15 15-21 21-16.
The men's doubles title went to Denmark's third seeds Mads Conrad-Petersen and Mads Pieler Kolding, who edged past England's fourth seeds Robin Middleton and Chris Langridge 19-21 26-24 21-11.
In the mixed doubles Sorokina was bidding for her second title of the day. The 2006 winner and Alexander Nikolaenko won 21-11 21-16 against seventh seeds Raj and Renuga Veeran, the seventh seeds from Australia.
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