Diamond-based photonic devices offer exceptional opportunity to study cavity quantum electrodynamics at room temperature. Here we report fabrication and optical characterization of high quality photonic crystal microcavities based on nanocrystalline diamond. Fundamental modes near the emission wavelength of negatively charged nitrogen-vacancy centers (637 nm) with quality factors as high as 585 were observed. Three-dimensional finite-difference time-domain simulations were carried out, having excellent agreement with the experimental results in the values of the mode frequencies. Polarization of the modes was measured; their anomalous behavior provides important insights to scattering loss in these structures.