Is a transition metal with 7 d electons ever diamagnetic?
As I noted in my comment above, I think the question is whether there are 7d electrons in the atom or in the ion. 

For example, if you take 3 electrons from 7, you get 4d electrons in the $\ce{M^{3+}}$ ion which obviously could (and should) be diamagnetic.

This is all, of course, a guess given what little you posted.

Let's say I had a similar question in my class. Students might then assume this $\ce{M^{3+}}$ is octahedral. (Personally, I'd make it a bit more obvious in the question.)

Given that the ligand is high-field, you get an initial MO diagram like this:



But... we're not done. This electron configuration is subject to a weak Jahn-Teller distortion. So you'd end up with an MO diagram like this:



That, of course, is diamagnetic.