Final answer:
Without context, identifying the exact song or artist from the provided lyrics relating to a character named Michael luring people to his disco cafe is not possible.
Step-by-step explanation:
The song referenced in the question, characterized by the lyrics “Yes, to dance beneath the diamond sky with one hand waving free, silhouetted by the sea, circled by the circus sands,” appears to be reminiscent of a poetic or lyrical style. While the question may be related to a specific scene in a book, movie, or television show where a character named Michael uses music to entice people to his disco cafe, without a specific context, it's impossible to provide an accurate answer.
If we are referencing popular culture, these lyrics could potentially be from a song that someone with the name of Michael might use in such a scenario. However, without additional context or information, identifying the exact song or artist solely based on the provided lines is challenging.