If the diode is failing, what are you going to do about it? As far as I can see you are intending to make some design changes. My suggestion and Jim's is to change the diode.
I think that the the act of removing the Rsense is causing a static discharge which damages the diode. You may not need the diode at all, but a 5 V zener diode would help in dissipating a static discharge.
You said that the diode fails after a while. I could be very difficult to work out exactly why it's failing. Static discharge is very unpredictable. I can't see why finding that out will help, when the solution is to change it anyhow.
The 1N6263 is a UHF schottky diode. The "UHF" means that it has been made with a very small capacitance, so that it will work at high frequencies. Schottky diodes are often faster to switch than conventional diodes and have a lower forward voltage. None of those attributes are of any use in this circuit. All design is compromise, so as the 1N6263 has been made fast and low capacitance, it has resulted in a very small maximum current, a smaller maximum voltage and a higher price compared to a 1N4007.