We teach diagramming here--but not Reed Kellog.   It's all done with
underlining and brackets, so the sentence never has to be re-copied.
 
The passive problem does not arise because part of the system involves
labelling the predicate verb with one of four labels:
        PVp(transitive-passive),
        PVl(inking),
        PVt(transitive-passive), and
        PVi(ntransitive).
For units left over after a passive verb we use the traditional term
"reserved" or "retained" object--the object being retained in the same
relationship to the verb that it had in its PVt state.
 
I've not heard of the squiggly line idea, but I like it!  If I ever have
to revert to R-K, I'll remember that.  Thanks!