A K&N air filter MIGHT be a good idea for a gas engine, which has its airflow restricted, but it is typically a bad idea for a diesel because diesel induction systems are already designed to admit the maximum possible air at all times. The upshot is that all you get from one on a diesel is dirtier air in the engine, which will shorten the engine life. You get no increase in power nor any improvement in mileage. This is in general.
I do not own, nor am I particularly acquainted with the OP's engine. I do know that for the two diesels I DO own, a VW Jetta TDI and a Jeep Liberty CRD, the self-help forums are full of people reporting bad results and no benefits from using a K&N on those vehicles.
So I am not a bit surprised that he reports less-than-satisfactory results. YMMV.