The dissociation dynamics of diiodomethane molecules (CH₂I₂) have been investigated following absorption of 98 eV XUV photons. In the measurement at the reaction microscope endstation at the free-electron laser FLASH2, ionic fragments created by 4d core ionization followed by Auger decay have been detected in coincidence. In the one-photon absorption channel CH₂⁺/I⁺/I⁺, a concerted three-ion breakup and a sequential dissociation via a rotating intermediate CH₂I²⁺ ion have been identified. Classical simulations based on a Coulomb repulsion model and ab initio molecular dynamics in the frame of the Density Functional Theory have been performed. Both types of simulations reproduce different aspects of the observed fragmentation dynamics, in particular a delayed second bond break after dissociation of the first iodine ion. In the study of the potential energy surface we have located a minimum after the emission of the first I⁺. We attribute the sequential mechanism to the trapping of the rotationally excited CH₂I²⁺ fragment in this transient intermediate, which corresponds to a potential energy well that protects it against the cleavage of the second C-I bond.