Yes. You absolutely can administer Diazepam (Valium) rectally. In fact, they make Diazepam suppositories for use in a variety of situations. For instance, if an infant cannot or will not swallow a pill, they can administer the medication rectally. There is no reason to attempt to insufflate Diazepam. It is not well absorbed by the mucous membranes of the sinuses like a lot of other substances are. Most Benzodiazepines share this quality except for say, Midazolam (Versed).
The only issue that I find to be a little bit dubious, is the fact that said suppositories are typically found in a suspension gel like propylene glycol. They mention in some medical literature that Diazepam can indeed be insufflated if packaged in an appropriate vehicle. For this reason, I believe that crushed Diazepam pills, made into a solution with water are not going to be absorbed with great efficacy. However, I still believe that the drug will be absorbed regardless based upon the environment of the rectum and the total surface area involved. I can't really stand by any of this though, which sucks.
Most effects produced by insuflation are most likely going to consist of the drug bypassing the sinuses and being absorbed as if the drug were taken orally.