I know you want to use a natural method, but I tend to find that they don't work very well at all, in my experience.
If you kept up the monthly treatments with a product like Advantage (made by Bayer- Advantage, advocate etc are the ones I seem to have more success with than Frontline. havn't tried revolution) you'll find the flea population to dwindle dramatically. Fleas cannot survive off humans, and must feed on dogs/cats to survive and reproduce. Also, with these spot-on applications (you apply the tiny volume of solution to the back of the neck for dogs) the flea does not actually have to bite, simply come into contact with the substance. From what I've learnt, when you apply the product it goes into the hair follicles and is slowly released, which kills fleas for up to a month (as the manufacturers say). Fleas, requiring to feed on the dog, will sense vibrations, air movement, CO2, temperature etc. to detect when a warm blooded mammal is passing, and they seem to be able to tell the difference between humans and dogs, for example (something to do with the differeing odour and chemicals released by each species). When the fleas sense the presence of a dog, they emerge from their 'hiding spots' in floorboard cracks, beneath the carpet etc. and hitch a ride. So, when you apply a product like advantage, it will kill the fleas immediately on the animal, and then any fleas jumping onto the dog after the application will also be killed. So, as I mentioned, if you kept the treatment up and applied it once a month, you'd soon dramatically drop your flea population, both on the dog (any seen on the dog after the application are most likely ones that have just jumped on and have not yet died- just because you see the fleas on teh dog after the application does not mean it is not successful- you'd need to monitor the flea numbers in the environment as well) and in the environment.
This will sound bizarre, but if you have such a huge infestation in your yard, you'd be best to treat the dog, wait about 24hrs for the product to be distributed over the dogs body, and then let it out or a nice really long run in the yard- any fleas will be attracted, any eggs will be stimulated to hatch (preventing from them lying dormant for however long, and getting a new infestation) and pupae will mature etc. The fleas that then hitch a ride on your pup willl die, and its a pretty neat way to 'cull' the flea population pretty quickly
Theres no real quick solution, fleas are an absolute pain in the **** to get rid of completely, but they are easy to control. Thorough vacuuming of carpets is also thought to be beneficial, though it must be very thorough and even then you won't get all of the larval and pupae stages, because they are embedded down there pretty darned well! but everything helps
Hope you understood all that, and sorry for the long post. I haven't had any experience with the DE that you mentioned, so cannot comment on that
I wish you the best of luck with these annoying parasites!
Also as another note- you will need to maintain the treating regime, for at least a few months- if you do not, and say, for example, treat only once, you will not get all of the eggs, larval and pupa stages in the grass, plants, floor cracks, carpet, dirt etc. which will all then infest your dog and initiate the problem again, within a very short span of time. The products I've been referring to are pretty safe, and I've never had a problem with my cats, dogs, fish, birds and turtle
they come in an easy to use, disposable pipette with the appropriate treatment volume, so you treat the dog, throw the pipette out and its all done