3D surface reconstruction is essential across applications of virtual reality, robotics, and mobile scanning. However, RGB-based reconstruction often fails in low-texture, low-light, and low-albedo scenes. Handheld LiDARs, now common on mobile devices, aim to address these challenges by capturing depth information from time-of-flight measurements of a coarse grid of projected dots. Yet, these sparse LiDARs struggle with scene coverage on limited input views, leaving large gaps in depth information. In this work, we propose using an alternative class of "blurred" LiDAR that emits a diffuse flash, greatly improving scene coverage but introducing spatial ambiguity from mixed time-of-flight measurements across a wide field of view. To handle these ambiguities, we propose leveraging the complementary strengths of diffuse LiDAR with RGB. We introduce a Gaussian surfel-based rendering framework with a scene-adaptive loss function that dynamically balances RGB and diffuse LiDAR signals. We demonstrate that, surprisingly, diffuse LiDAR can outperform traditional sparse LiDAR, enabling robust 3D scanning with accurate color and geometry estimation in challenging environments.