A good friend of mine Nathaniel Linville is the owner/operator of "The Angling Company" fly shop in Key West Florida Keys. Nathaniel has fished with many of the best fly fishing guides in the world and has some very interesting outlooks on all things fly fishing. Check out below what he thinks of the famous Diablo Crab.
The merkin is designed to imitate a crab. Most people will tell you that a good presentation to permit involves letting the fly fall in front of them, to imitate a crab diving to the bottom. And since most permit eat the fly in the first few seconds after they see it, this makes a lot of sense. Here's the problem: the merkin doesn't look like a crab. Even a little bit. And if you go to all the trouble to imitate a crab diving to the bottom and don't get a grab, now you have to make this thing that's supposed to look like a crab move like a crab--an impossibility, given that even a six inch "bump" strip translates to the crab moving about six times it's body length laterally in a few seconds.
My position is simple: I don't think that permit eat a fly thinking "this is a crab". I think that a good permit fly could be a crab but when stripped, it can suggest a shrimp or a small bait fish. The key here is to have a fly that can be thrown well ahead of a permit on white sand and "popped out" of the bottom when a permit comes by, one that can be stripped quickly in a channel, or one that can be dropped close to a tailing fish. The best fly for this application, in my mind, is Dave Skok's Diablo crab. Like any good fly it can be tied in a variety of colors and with different tails (bunny strip, splayed hackle, polar bear, rubber legs, etc.), but the basic tie involves making a body of webby hackle palmered over chenille on the body and trimmed on the bottom. When stripped, this hackle will be pushed back along the hook shank, slimming the profile of the fly. If left to fall slowly or slid along the bottom, it will maintain a wide, crustacean-like profile. The key is that this fly adapts to how it is fished, not the other way around. And in the case of permit, a fish that can be found in countless different attitudes, it pays to have a fly that will easily adapt.
Now I know that some guides swear by their "secret" permit fly, and there are some that actually look a lot like crabs. If you get on a boat with a guide who hands you a rod with their favorite permit fly tied on, my advice is to fish it. There's a reason they use it, and it works for them. Permit are found in a huge variation of attitudes and behaviors, and if a guide has been fishing certain fish in a certain area a certain way then that's what you should be trying to get in on. Forcing blindly ahead with a preconceived notion of what will work causes a far greater number of failures than anyone wants to admit, and it is this fact alone that is responsible for more misinformation and lack of learning than almost any other--but this line of thinking can become circular: avoiding convention can only be taken too far before you are guilty of following rules in the spirit of form and not function, thus reducing your own ability to adapt to conditions that are characterized by constant change.