Rocket, I don't think you can go wrong either way, and though I haven't spent time in the diesel it's clearly got its plusses over the rest of the range.

However, considering your question's initial emphasis on handling and vehicle dynamics, I'd only add that a CS and a GTS are not just visually different, but meaningfully different dynamically, and there's also a serious element of sound. If you haven't driven a GTS with PDCC I'd suggest you try one if you can find one. But that's only if the dynamics will take a back seat to MPG and whatever other pros the diesel will offer.

These things may or may not matter enough against the benefits of the diesel in the overall balance of your decision making process, but for as much as agility (and "spirited driving") as can be pulled out of a vehicle this size, the GTS will give you the most smiles per mile, and I expect by a long margin. For what it's worth, I didn't even consider another SUV. I was cross-shopping this car against the M5 and E63. I leased an M5 and returned it soon after and went with the CGTS. Surprisingly it's only a couple hundred pounds heavier than the current M5 and, while it's of course nowhere near the speed potential of the M5 I personally find it more fun and more honest to drive on a good twisty road. You also can't beat the seats in the GTS--they're incredible.

That said, of course, the beauty of the Cayenne range is that it can do well in so many different settings. I'm only giving you my personal feedback because I spent a lot of time making a similar decision and I've been pleased with the result. Depending on what's most important to you that balance can slip either way. Even though Porsche's endless options and model variants can be overwhelming at a certain point, it's great that they make them in so many different flavors.

You're going to be happy either way. I've seen some diesels that look pretty damn good with the right spec.

Good luck...