Relays with a diode

the current rating is not very important here, 1A diodes should work fine for this purpose.

It sounds like you may have the diode in backwards, when the relay coil is powered the side of the diode with a band (the cathode) should be at the positive side of the relay coil. This is backwards to what many think but that is the whole purpose,only to shunt the negative voltage...

I guess it makes sense that the diode is simply to block the voltage spike, but as you described the cathode side of the diode should be on the same side as the positive power input. Since a relay can be powered with the positive on either side I put the cathode on the 86 terminal where I also hooked up the positive. This caused a Positive 12volts to show up at the 85 terminal. I tried putting the postive on ht 85 terminal and the exact same thing happened. In this test the diode stayed in the same place the whole time. 

I will have to try this test again with just a relay and not use a diode to see what happens with voltage is applied.  

BradLeonard, dont worry about seeing voltage on both sides of the diode. As long as your Neg lead is NOT on the striped side (cathode) you will be fine.  Think of the striped side as a one way "gate" that allows whatever is on the striped side to pass through to the other side. The reason it is not a short circuit when you connect NEG to the other side is this. Electrons will only flow from NEG to POS. So although the POS side sees an open gate to the NEG side, it wont go through because POS electrons will not flow to NEG. Therefore when you put NEG on the striped side and POS on the other side, NEG sees an open gate right to POS...you guessed it, a short circuit. That might be a little too simplified of an analogy but oh well.

Ever wonder why they say having a good ground is so important? Electrons actually enter your equipment from the ground cable and flow back to the battery on the POS cable.

Oh and by the way, the reason your seeing +12v on both sides of the diode when its soldered to the relay and the ground is not hooked up is because the relays internal coil is connected to both terminals and is very little resistance.