I concur that you should move them from the wall. If the background is very light and very close, you're more likely to have shadow problems.
I wouldn't think that you would need a diffuser if you are bouncing off of the ceiling (unless it is quite low and your subject quite close).
Actually, I'm having trouble squaring the shadow with a ceiling bounce. Looking at the shadow, it looks like the light source is relatively small (sharply defined shadow) and about level with the heads in the picture (the appears level with the heads) and a bit to your right (the shadows are left of the subject). Are you sure that didn't have relatively bright lamp to your back right that was causing the shadow and not the flash?
There are other indications that you had a bright, non-diffuse light source. When looking at the original size photo, I see three bright reflections in the woman's glasses. One is quite large and bright. I'm guessing that it was the cause of the shadow and not the bounce off of the ceiling.
I have to admit that I am terrible at lighting, so take everything I say with several very large, poorly lit grains of salt.