Doesnt the -w thing make diablo 2 run in directdraw (2d) mode even if you set it to run in D3D? It did that with the stress test, not sure about the full version (dont have it yet)
Go into the graphics options and see if you can enable the perspective thingy. if you cant, the game is running in 2D mode. if you can, then D3D mode would work.