Partial Readonly

Can the diagram be setup in a partial readonly state i.e. user can not create\delete links or new nodes but is able to just move the nodes around (in case of overlap etc.)

That’s about the behavior when the Model is not Modifiable. DiagramModel.Modifiable, actually, is false by default.

That is what I was looking for.

But how can I disable context menus (they are in the node template) in this mode?

Regarding context menus – that’s beyond the scope of GoXam.
But I would think that setting ContextMenuService.IsEnabled to false might do what you want. Unless you want to show some commands but not others. In which case you’ll need to build it dynamically.