I can't speak to the diabetes end of it. But be aware that the recovery time for a c-section is longer than the vaginal delivery. I was almost 37 when our son was born, and it took me 6 weeks to feel back to normal. (Maybe I'm a wimp but I generally don't think so! : ) )
We intended to have a vaginal birth but our son's heart rate went WAY down with each and every contraction, so we opted for the c-section. Just an hour and a half after we got to the hospital, he was born--healthy baby VS problematic birth.
That being said, it depends on how invested you are in the vaginal birth VS c-section. If you are fine with the c-section, go with it. If you really want a vaginal birth, there are plenty of big babies born vaginally. But it is best to weigh all the known risks and decide for yourself.
Are there any additional complications, besides size, for you or your baby? After we had made the decision to have a c-section, the nurse confessed she was SO glad we had made that decision. If not, she would have tried hard to help us make a different decision because of the danger to our son, while still allowing us to make the final decision.
During the birth, I was awake but numb where I needed to be numb. It was so cool. I actually felt his volume being removed. He just came out a different opening. And I had a healthy baby in the end.
I went to a support group for c-section moms after our son was born. I was surprised how many moms felt like a failure for having a c-section. To us, it was a medical decision that was kind of a no-brainer. Our son was in danger. But each person is different.
Best of luck with the remaining month, your health, your baby's health, and your final decisions.