The ultimate isolation offered by levitation provides new opportunities for studying fundamental science and realizing ultra-sensitive floating sensors. Among different levitation schemes, diamagnetic levitation is attractive because it allows stable levitation at room temperature without a continuous power supply. While the dynamics of diamagnetically levitating objects in the linear regime are well studied, their nonlinear dynamics have received little attention. Here, we experimentally and theoretically study the nonlinear dynamic response of graphite resonators that levitate in permanent magnetic traps. By large amplitude actuation, we drive the resonators into nonlinear regime and measure their motion using laser Doppler interferometry. Unlike other magnetic levitation systems, here we observe a resonance frequency reduction with amplitude in a diamagnetic levitation system that we attribute to the softening effect of the magnetic force. We then analyze the asymmetric magnetic potential and construct a model that captures the experimental nonlinear dynamic behavior over a wide range of excitation forces. We also investigate the linearity of the damping forces on the levitating resonator, and show that although eddy current damping remains linear over a large range, gas damping opens a route for tuning nonlinear damping forces via the squeeze-film effect.