I had this.problem too on second level trying to get rid of red diamonds, however, through trial and error I've found the solution.
When the bomb is ready, activate it but DON'T press the green tick. When bomb is flashing in the middle of the screen, whatever colour, PRESS AND DRAG THE FLASHING BOMB TO THE RED DIAMOND. THE FLASHING BOMB WILL CHANGE TO RED. You can now press the green tick to activate it!!
Hope it works for you......