In pursuit of developing a robust ULD framework, we explore the potential of a recent paradigm of self-supervised learning algorithms, known as diffusion models. Some recent works have shown that these models implicitly contain important correspondence cues. Towards harnessing the potential of diffusion models for the ULD task, we make the following core contributions. First, we propose a ZeroShot ULD baseline based on simple clustering of random pixel locations with nearest neighbour matching. It delivers better results than existing ULD methods. Second, motivated by the ZeroShot performance, we develop a ULD algorithm based on diffusion features using self-training and clustering which also outperforms prior methods by notable margins. Third, we introduce a new proxy task based on generating latent pose codes and also propose a two-stage clustering to facilitate effective pseudo-labeling, resulting in a significant performance improvement. Overall, our approach consistently outperforms state-of-the-art methods on four challenging benchmarks AFLW, MAFL, CatHeads and LS3D by significant margins.