My thinking was 58 + the 6-10 degrees caused by fermentation puts it at 64-68 degrees. Perfect ale temp, I thought...Anyway I have heard the term dyacetyl rest but don't really understand it, can you explain please. Should I store the beer at room temp or put it in the fridge for cold conditioning? I am really hoping to save this batch.
The yeast produce diacetyl during fermentation. All strains do this, but some strains produce more, and are notorious for it. The good news is that once the fermentable sugars are gone, the yeast will go back and actually digest their own waste products, including diacetyl.
A diacetyl rest is simply encouraging the yeast to clean up the diacetyl by raising the temperature slightly, or allowing the beer to remain on the yeast cake longer, or a combination of both.
Most often, just as fermentation is tapering off, the temperature is raised by 5-10 degrees to encourage the yeast to remain active and clean up the diacetyl. So, if you're fermenting at 50, for a lager, you can raise the temperature up to 60 (some even go higher). For an ale fermenting at 64ish, raising it to 70 may do the trick.
In some beers, diacetyl can be part of the flavor and isn't considered a flaw. I've noticed it in some English ales, and I think ringwood ale yeast produces quite a bit of it during fermentation.
In very small amounts, diacetyl may present as an oily mouthfeel, or a slickness remaining on the tongue. In larger amounts, it will taste like butter or even butterscotch. I do a diacetyl rest if I'm ever sampling and get that "oily mouthfeel".
Once the beer is racked off of the yeast cake, it's really hard to get the yeast to work to clean up the diacetyl, though. You can try keeping it at room temperature a bit, and swirl it up to resuspend any yeast that's fallen out. It might work, but it's usually better to fix it at the end of primary.
