hiya no direct experience with diabetes and PAD however I am type 1, my mum is a radiology nurse and specialises in vascular medicine and my lovely dad has PAD (popliteal aneurysm to boot).
Like the above poster my dads advice has been to continue walking as much as possible. He was diagnosed 3 years ago, takes aspirin and statins and his circulation is definatly improving. Its not a dramatic improvement but gradual, and certainly for the last 6mo his ability to walk longer distances at more of a speed is certainly much more than when he was diagnosed. Like you surgery is not an option for my dad - the risks for planned surgery are too high, he has to wait and see if it becomes an emergency. If it does become an emergency then of course they will attempt the surgery, but when the alternative is to lose a leg its certainly worth trying then. In the meantime he has given up smoking, and after my (VERY) recent type 1 diagnosis is looking at changing his diet, considering he is about 5 stone overweight and its all around the middle he really needs to. He has also been back to the gp since my diagnosis as his own sugars were above the normal range, and whilst the gp isnt diagnosis diabetes yet he is keeping a close eye on the situation.
It does feel like your getting only a negative response, as often surgery is just too high risk... however I am suprised that they did not discuss the benefits of excercising in order to improve circulation to the affected limb through widening the other arteries around it.
Anyway I will stop rambling now, I hope my post has helped, and please excuse all the typo's. I still have very blurry vision following my christmas diagnosis.
sal x