Here check this out. Read the section on safety considerations...Where have you got your info from re: D E can be dangerous, i have read so much about DE,GOOD AND BAD,5 OR 6 Years ago i had my hole bird room fogged by a pest control company with 300 finches and canaries in the room at the time to try to stem an outbreak of redmite,never have i seen such a mess in my life,MAD you might say and now i tend to agree,not worried at the time because i had studied all the does and dont's and took the word of the operator trained by the company that sold the D E,TO CUT A LONG SHORT, It did no harm to the birds at all,BUT, The redmite well it never harmed them either,WHAT a complete waste of time and hard earned money,i have yet to see any proof about anything ever written about this ground down earth,and doubt i ever will.
http://en.wikipedia.org/wiki/Diatomaceous_earth#Safety_considerations
Check this one out as well...
http://www.azpartsmaster.com/images/msds/de25.pdf
If you are still wondering, there are many threads and posts here on BYC about the effects people had with inhaling the stuff. Birds lungs are much tinier and shouldn't be breathing it in either.