Why would lactate be high in diabetics?
This condition is also known as "lactic acidosis" and can be pretty dangerous, since it influences the pH of the blood. 
When we metabolize glucose to produce ATP and NADH it is metabolized finally to pyruvate in a process called glyolysis (I am not going into detail here since this is nicely explained in the Wikipedia). Pyruvate can then be used further in the body in the Gluconeogenesis, the Citric acid cycle and other pathways. 
If a lot of energy is needed Pyruvate is converted by the pyruvate dehydrogenase into acetyl-CoA. 

The problem with diabetes is that the pyruvate dehydrogenase can be inhibited in diabetes. If the body then needs a lot of energy pyruvate will be converted into lactate which is released by the cells into the bloodstream.
Gluconeogenesis cannot be activated since this needs either Pyruvate, Acetyl-CoA or Oxaloacetate as starting material. The other problem with this process is that this happens in the liver and when the glucose is released into the bloodstream, it cannot be taken up by the cells due to the lack of insulin.

The conversion from Pyruvate to Lactate is katalysed by the Lactate dehydrogenase and needs NADH + H+ as a co-factor. The image below is from the Wikipedia article on Lactate dehydrogenase.



This reaction is highly exergonic which means its preferred direction is to the right side. To change this and make Pyruvate from Lactate you need an excess of NAD+ which usually only happens in the liver.

There is also an epidimiologic study available showing a strong correlation between elevated blood lactate levels and diabetes type II: "Association of blood lactate with type 2 diabetes: the Atherosclerosis Risk in Communities Carotid MRI Study."