Possibly the wrong oil viscosity looks like it should have 15w-40 for southern cal, This is what I found in the common problems section at Repairpal.com Using the correct oil for this engine is critical. Improper engine oil can foam in the high pressure system and not develop enough pressure for operation. Symptoms of this can be hard starting, long cranking time before start, rough engine idle, and a lack of power. Another sign is tiny bubbles in the oil on the engine oil dipstick after the engine is shut off. The additives in the correct oil that protect against foaming can still break down, so changing the oil at the correct intervals is important.
The problem could be glow plug related as I see a glow plug solenoid and a glow plug relay and also the glow plugs, the glow plugs are a little heating element that needs to heat in the cylinder to aid starting the diesel engine and maybe plugging in the block heater heats the cylinder enough to start. How do you start it once you drive it and turn it off?
The solenoid on top of the engine is usually the problem,once you turn the key the solenoid is supposed to make the circuit use a light or volt meter on the side that goes to the glow plugs and make shure it is making contact inside the solenoid .Even though the light comes on in the dash does not mean the circuit is making contact,then when the light goes out it does not mean that the heater has stopped heating that only means that it has heated long enough till it should start .The Glow plugs will keep heating for 2 minutes after the light goes out .Anyone could put a light on the glow plug side and mount it in the Dash so you could tell dead certain that the system is working .