The problem as I see it is "correct state of diodes". I guess your idea is:
Assume a steady state DC circuit, with only resistors and diodes (DC + steady state render capactiors and inductors irrelevant).
The steady state solution will have some of the diodes working as open circuits, and some others ideally working as -0.6 voltage drops (or resistors).
So if we could locate the open circuit diodes, we could approach the steady state of the system as a purely linear network.
I think the approach you have made consists of:
1) Initally, solve assuming each diode is "on", that is, it works as a -0.6V voltage source (or resistor).
2) Given the solution, check if some diode is conducting in reverse.
3) (?!) All the reverse biased diodes are converted to open circuits.
4) Return to 2) until all diodes are either open circuit or conducting in the forward direction.
The problem is step 3: the diodes cascade and affect each other.
Consider the diode circuit attached. The real solution has all resistors conducting (I_R1=I_R5=22.7mA, I_R2=82.9mA).
Now, if you change the diodes by either resistors or -0.6V sources, you will have both D1 and D3 marked as reversed, and taken away from the circuit. Then, in step 4 you converge to a solution that has I_R1=I_R5=0, which is not correct. The problem is that the fact that D1 is turned on makes D3 to be reverse biased. However, if you turn D1 off, then D3 is forward biased.
I hope the problem is clear: depending on which diodes you choose to turn off, you converge to different solutions. This gives, in principle, an exponential choosing complexity. Even worse, if you arrive at an incorrect solution, how do you know it's wrong?
I think step 3) could be improved imposing an elimination order to the diodes, based on which diode turning off could affect subsequent diodes, but I think that could wind up being more complicated than solving a nonlinear system.