I've used it for many years...in the coop, favorite dusting spots, in the feed, and in treats.
I rescue ailing/mistreated chickens...They often have sick, odd colored, smelly poop....I put them on a mixture of wet food and 1tsp per chicken of DE immediately and their poops become normal within a couple of days!
I do not use it liberally throughout the yard...it does kill all bugs...beneficial or not. I've recently "painted" my duck coop with it...no more bugs or spiders YEA! (I mixed it with orange oil and literally painted it on--although its gone by the water-go figure)
I've heard of exactly one chicken dying where someone attributed it to DE. The crop had a dry mass full of DE.... Although I did not see it, my suspicion is the chicken probably had an impacted crop...and the DE may have dried it out making it worse. Even if I'm wrong: One Negative in all my years of using it and suggesting it to others....against hundreds of "how great this stuff is".....I'll keep using it thank you.
Oh...No hard evidence it kills internal parsites. Lots of anectodal info it does. I'll say that my vet was shocked when they did check for worms in my cats (oh- my dogs and cats get DE too)...no worms, no wormers, and they eat the vermin they catch! I also had a sick duck recently and no worms in her poop either (more shock from the vet). It is my personal opinion that it only works if the chickens ingest enough which is difficult with free-ranging chickens. I also would not be surprised if it did not treat heavy infestations....but I do believe it's a great preventative as well as curative for light worm cases.
Make sure it's food grade. Garden varieties often have other fillers and/or permethrin in it (which is toxic to cats).
Some do treat it as the miracle cure for everything. I'll just say it has a lot of beneficial uses and I'll continue to use it.
Sandra