With the resistor in parallel, you are creating a voltage divider where one of the "resistors" is the internal resistance of the piezo device. Yes, that will reduce the voltage. Since the piezo (unlike most voltage sources) has high source-impedance, a high-value resistor in parallel will reduce the voltage.
With the diode, the purpose it to prevent a negative current correct? How will this act to protect the pin in the case of a strong knock?
No need for a zener, the pin protection diodes provide adequate protection for the pins against the small current generated by the piezo, unless you plan to drop a 14 ton weight on it.
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