Let the original weight of the diamond be \( x \). The cost of the diamond varies as the square of its weight, so the cost is proportional to \( x^2 \).
Let the cost of the original diamond be \( kx^2 \), where \( k \) is the constant of proportionality.
The diamond breaks into four pieces with weights in the ratio 1:2:3:4. Let the weight of each piece be \( x_1 = 1x \), \( x_2 = 2x \), \( x_3 = 3x \), and \( x_4 = 4x \).
The cost of each piece is proportional to the square of its weight:
\[
\text{Cost of piece 1} = k(1x)^2 = kx^2
\]
\[
\text{Cost of piece 2} = k(2x)^2 = 4kx^2
\]
\[
\text{Cost of piece 3} = k(3x)^2 = 9kx^2
\]
\[
\text{Cost of piece 4} = k(4x)^2 = 16kx^2
\]
The total cost of the four pieces is:
\[
kx^2 + 4kx^2 + 9kx^2 + 16kx^2 = 30kx^2
\]
The merchant got Rs. 70,000 less for the pieces than the original price, so:
\[
30kx^2 = kx^2 + 70000
\]
\[
29kx^2 = 70000
\]
\[
kx^2 = \frac{70000}{29} \approx 2413.79
\]
Thus, the original price of the diamond is approximately \( 2 \) lakh Rs.