We have analyzed Cluster magnetic field and plasma data during high‐altitude cusp crossing on 14 February 2003. Cluster encountered a diamagnetic cavity (DMC) during northward interplanetary magnetic field (IMF) conditions, and as IMF rotated southward, the spacecraft reencountered the cavity more at the sunward side. The DMC is characterized by a high level of magnetic field fluctuations and high‐energy electrons and protons. Ultralow‐frequency turbulence has been suggested as a mechanism to accelerate particles in DMC. We demonstrate in this paper for the first time that many of the low‐frequency fluctuations in the cavity are back and forth motion of the DMC boundaries over the spacecraft and transient reconnection signatures. We also find examples of some isolated high‐amplitude waves that could possibly be nonlinear kinetic magnetosonic modes. The lack of strong wave power at the vicinity of local ion cyclotron frequency in the DMC suggests that perhaps a mechanism other than wave‐particle heating is a dominant source for ion heating in DMCs.