I know there are a few options for ye olde' diverter magnet mod, but I thought I'd share mine with you in case it helps anyone out. All you need is the following:
1. 0.7" x 0.11" (18mm x 3mm) Neodymium magnet disc (available in 3 pack for about $5-10)
2. 1/2" wide magnet tape (available in 30" roll for about $3)
3. Krazy Glue or Gorilla Glue
I've heard of using a neodymium magnet disc before but these things are STRONG, and sure enough when I held one directly to the diverter housing the magnet was too strong to allow the ball to drop onto the playfield when inverted. So then I thought of magnet tape, although I doubted it would have enough magnetism to hold the ball in the diverter frame if it came rocketing in (as it does frequently). Well, sure enough, the magnet tape was nowhere near strong enough to hold the ball in the diverter when it entered at high speed, HOWEVER... I found that when the magnet tape was affixed to the outside of the diverter and the neodymium disc was affixed to the magnet tape, the tape insulated the magnetism from the neodymium disc just the right amount to hold the ball firmly in place when it comes rocketing in, AND drops the ball onto the playfield nice and softly when inverted. EVERY time I've tried it. I've tested it about 100 times (or at least it seems like it) today and it works perfectly every time.
Just cut a couple of strips of the magnet tape (I trimmed the width of the bottom strip just so it fit uniformly) and affix it neatly to the outside of the diverter housing. Then simply super glue the neodymium magnet disc onto the magnet tape. I've affixed the disc in the extreme "upper - front" of the diverter housing side wall if looking at it from the left side of the cabinet. The nice thing is, if you every wanted to remove it, you just peel off the magnet tape and will have no super glue residue on the diverter housing.
Try it out and let me know how it works out for you!
Here are some pictures of the products I used and how it looks when done. As you'll see, it's in no way intrusive, or hacky looking. In fact, I already don't even notice it when playing. (aside from it working as intended)