Yes I think that is the confusion, there was talk of making Assange a diplomat to break the deadlock, surprisingly, one does not have to be a citizen of a country to be a diplomat for that country, for example, if a country breaks off diplomatic relations with another country they can have a third party (usually a country but can be a person) to act as their "diplomatic representative", so that there is some form of contact if necessary. In Assange's case I can see why the UK would reject him acting as a "third party" diplomat, now he is a citizen maybe there is some form of appeal to the UKs rejection to the UN.
iirc a UN panel declared him to be under "arbitrary detention" and said it was a breach of his rights under international humanitarian law, the UK appealed but lost their appeal. I think Sweden has dropped the cases against him so now he just faces charges regarding breaching bail in the UK, I'm sure some solution will be found soon, even if it is packing him off as diplomatic mail