Chemical reaction and shift in magnetic susceptibility sign
Seems to me any reaction involving the recombination of two radicals leads to a closed-shell diamagnetic species (which oxygen is definitely not!). I can't think of any other examples immediately. You could make singlet oxygen, which is diamagnetic, from paramagnetic triplet oxygen by irradiation, but then there is only one reactant. 

If you heat a paramagnetic substance enough so that the thermal energy can overcome the energy that is gained by the alignment of your magnetic moments, I believe the substance will not exhibit paramagnetism in a magnetic field above that temperature. So that seems doable. 

Edit: Actually, I found an example: ozone is diamagnetic and can be made from paramagnetic oxygen and an oxygen radical. So that could be a possible reaction where you have two paramagnetic reagents combining into a diamagnetic product.