Watched old boy work for diamonds (8)
I believe the answer is:
observed
'watched' is the definition.
('observe' can be a synonym of 'watch')
'old boy work for diamonds' is the wordplay.
'old boy' becomes 'OB' (abbreviation for a private school 'old boy').
'work for' becomes 'serve' (I've seen this in another clue).
'diamonds' becomes 'd' (abbreviation in card games).
'ob'+'serve'+'d'='OBSERVED'
(Other definitions for observed that I've seen before include "Said" , "Abided by, rules say" , "celebrated" , "saw" , "Noticed or remarked" .)