Recent innovations in Test Compression are enabling implementation of very high compression ratios. This paper analyzes the impact of high compression on resolution and performance of conventional diagnosis methods. The diagnosis resolution is observed to be unaffected by increasing the compression ratio if there are sufficient failures and patterns. However, the diagnosis run times increase significantly, resulting in significant throughput issues in Layout-aware Volume Diagnosis. A new diagnosis approach is proposed for high compression modes that achieves best possible resolution with significant run time speedup. Experiments on large industrial designs show up to 4.7X speedup with no loss of diagnosis resolution.