As gsfowler said, a simple pin prick test can be used to confirm sciatica nerve damage. What the MEB is saying, and I'd agree from my reading for AR 40-501, is sciatica nerve damage (radicular pain) doesn't, by itself, fail retention standards. Are they refusing to list it as existing? That's a different problem all together. Do they have any conditions related to the nerve damage that they did list as failing retention standards?
Its important to understand the different steps at this point. MEB is just saying if a condition listed in AR 40-501 applies to you and does not meet retention standards, as well as all other conditions that are rateable. Sciatica nerve damage is ratable, and so should be listed by the MEB and described in the NARSUM. The PEB looks that over and says ok, well, of all these conditions, these are the conditions that are listed which are preventing him from being a Soldier, hence unfit. The MEB and PEB do not have to agree, although the PEB is also guided by AR 40-501, not the VASRD. So I would say its important to get more of a diagnosis, but not 100% necessary, since they can say the condition contributes to being unfit, and hence gets the DOD %. Then the VA rates every condition, fitting or not. So it may not even be important for a condition to be unfit, since for many they receive the VA money not the DOD money.
Do they have any clues as to why your nerve is messed up? You could ask for an IMR to review the NARSUM and submit a rebutall with your own documents to say why it is unfitting. Is the nerve damage just pain without effecting movement? If it effects movement, that should be evidence enough to put it under the correct diagnosis. If its just pain that interferes with the performance of duties, you may be able to get it unfit based off the commander's statement showing how it effects you.
As far as putting it on hold for more diagnostic tests to be performed, my understanding is they throw out the MEB if there is no conditions found that fail retention standards. Once the right tests are done, a new MEB is started. Are they kicked out the MEB all together for meeting retention standards?
I don't know if you can just say wait, hold up until X, Y and Z tests are done. If you have other failing conditions, my understanding is they just proceed with what they have. I think there may be a way for the servicing hospital commander (MEB hospital) to recall a case for additional tests, but its generally rare. Asking for the IMR and then asking to put in rebuttal documents should give you enough time to get an EMG done though.