Daver, no, as Hugo says, it is a BRK (B*) to the Monitor. If /diag was held Low, it would perform a Call to the Monitor. The Program Counter is sometimes in low RAM and sometimes at $Dxxx.I would guess bad ROM or bad zero page RAM.The /DIAG signal enters one of the PIAs or the VIA chip. I can't tell you which one at the moment). If this pin is LOW on powerup, this is the behavior you will get. If the PIA/VIA is duff, you may also get the same outcome.
Dave