Stage 1 diastolic dysfunction is a very common finding and is the mildest form. I had that finding on an echo in 2006 and it was gone in 2007. This normally has no affect of life expectancy unless as Ed noted there is an underlying cause that is not treated, most commonly high BP.
Just to add, high blood pressure can also cause the problem and of course can be controlled with medication.
Impossible to answer because each case is different. In many cases, the person goes on to lead a normal natural life because with age, our ventricles can stiffen somewhat. It isn't always the case that stage 1 is caught, it's nearly always identified at a much later stage because symptoms don't normally exist in stage 1. The cardiologist will have to establish the cause of the dysfunction (if it isn't age). It could be one of many things, from blocked arteries to an infection or leaky valves. Being diagnosed so early is a very good thing and with the right treatment/intervention, the person could go on for many more years yet.