Park in the small car park in Diggle, near where the canal emerges from the tunnel. Cross the bridge over the railway, by the three different tunnel mouths. Head along the road and past the Diggle Hotel. Follow Boat Lane up the hill. After passing through fields, you start to reach the egde of the moors. The climb steepens as the path goes up on to the moors, past the massive spoil heaps left by the building of the tunnels. Eventually you arrive at a small reservoir by the A62. On a clear day you can see west towards Manchester and the Cheshire plain, and even Winter Hill in Lancashire.
Head along the pennine way south. The path heads away from the road, and out on to some open moorland. The path is easy going and wide, as it follows the former route of a old turnpike. You can see down the valley towards Huddersfield, and the steep ridge of Pule Hill. Just after a washed out gap in the old road, look for a sign pointing towards Marsden, and take the left fork, which runs towards the base of Pule Hill. Follow the path towards the road, taking care when crossing the steep sided gully just before the road. Cross the road, and pickup the gravel track by the Hades Farm sign. Follow the track along the side of the hill, where there are some lovely views of Marsden, Butterley Reservoir and the hills around. Finding the right path down is tricky around the farm as the footpath signs seem to have gone 'missing'. Just were the track turns to head uphill, by the first farm building, look for a track behind the gate heading steeply downhill. Look for a path crossing to the left after the next stile, and use this to pickup a very steep path downhill which eventually reaches the A62. Go uphill on the A62, util on the right you can see a turn that heads down to the canal. Look below you to see the various tunnel mouths of the canal and railway immediately below. Head to the excellent Tunnel End Inn (which isn't actually at the tunnel end - that's a cafe) for a well deserved rest. There's a cafe and a visitor centre offering boat trips into the Standedge canal tunnel below the pub, which is worth a visit. The canal tunnel is quite a feat of engineering for it's age, being higher, deeper below ground and longer than any other canal tunnel in the UK. Not bad for a 200 year old tunnel. Oddly enough there are also 3 railway tunnels that follow almost the same route through the hill, because the nearby canal made the task of removing spoil much easier.
You can then either walk back up to the A62 to catch a 184 bus to Diggle, or carry on into the pleasant village of Marsden along the canal.