Forms thick overlapping non-porous shells: Incorrect. The shells are indeed overlapping (epitheca and hypotheca) but they are highly porous and thin, not non-porous.

Is embedded with silica and lignin: Incorrect. They are embedded with silica (silicon dioxide), not lignin.

Forms non-gritty soil: Incorrect. Diatomaceous earth is commonly used for polishing because it is gritty (abrasive).

Is indestructible: Correct. Because of their siliceous composition, the cell walls do not degrade easily, making them indestructible.