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!