I've checked with a biochemist at the Department of Agriculture, who has a reputation as a sceptic and extremely cautious about food safety. He said that crystalline silica, which is in the pool-type diatomaceous earth, is a known carcinogen and should be treated with caution, not inhaled, etc.
As you guys know, this is a different product from food-grade diatomaceous earth, which is used as a dewormer, mite control agent, etc. The pool stuff is subjected to high heat, which changes the contents chemically.
Food-grade diatomaceous earth is required to have less than 5 percent crystalline silica. The biochemist said that in fact it has less than one percent and is therefore safe.
Also, he says that food-grade diatomaceous earth has been very extensively studied by the FDA. It has repeatedly found it to be safe and not to have any carcinogenic potential.
I'm not a scientist myself, so I leave it up to you to reach your own conclusions.