i'de have to say 60-40 olimar favor. after playing with black waltz at SNES and watching/copying how he does the diddy matchup, it made me go from losing to nearly consistent 2 stocks.
pick battlefield
as neutral if you can, this helps you a ton and you may not realize it. Stand under the platforms and camp, and shield his bananas and they pop up above you and land on the platform so he can't banana lock or anything.
also, right after he throws a banana and you shield, if you immediately grab him it stops any of his approachs after a banana throw. if he has 2 bananas, still go for the grab or fsmash the 2nd and then fsmash/grab after that, it usually either trades hits or stops him, so better to trade hits than to get 0-70.
imo this is a pretty good matchup for oli , and like goose says, guard the banans. don't throw them. stand right behind it and spam grab so he won't try to get it, or put it behind you and create the usual wall. if he tries to approach with his 2nd banana to get his second, you can shield the throw and grab him =]
and, the biggest thing, don't freak out if he is comboing you like crazy. that's the worst thing you could do in any matchup, just stay cool because it's not like you are going to get out anyways, just let it happen as it's going to. just be prepared for an opening where he messes up or he has to stop and take advantage of the situation where he has lost momentum