How is dynamic resistance of a diode modeled for large voltage variations?
The concept of dynamic resistance is a derivative:

\$ r = \frac{dv}{di} \$

As such, it only applies to variations of current and voltage that are small enough to allow us to neglect the non-linearity and use a linear model for the diode. 


  But if the voltage across the diode varies a lot like in a AC to DC rectifying diode, 


In this case, a linear model can't be used to model the diode's behavior over the whole waveform, and the concept of "dynamic resistance" which is a part of this linear model does not exist, so you'll have to use the diode equation.

If you only look at a specific point in time on the waveform, then you can calculate dynamic resistance at this point, depending on the value of the current at this point.