diag: Rectify possible double free in memory device mode

Currently, there is a possibility of double freeing the
buffer in memory device mode. This patch protects the
buffer properly and also does the required cleanup once
buffer will be freed.

Change-Id: Ia016884bff4d41f2f8c59a547bd00a862c477e01
Signed-off-by: Mohit Aggarwal <maggarwa@codeaurora.org>