We present a method to analyze the magnetic properties of frustrated Ising spin models on specific hierarchical lattices with random dilution. Disorder is induced by dilution and geometrical frustration rather than randomness in the internal couplings of the original Hamiltonian. The two-dimensional model presented here possesses a macroscopic entropy at zero temperature in the large size limit, very close to the Pauling estimate for spin-ice on the pyrochlore lattice, and a crossover towards a paramagnetic phase. The disorder due to dilution is taken into account by considering a replicated version of the recursion equations between partition functions at different lattice sizes. An analysis to first order in replica number allows a systematic reorganization of the disorder configurations, leading to a recurrence scheme. This method is numerically implemented to evaluate thermodynamical quantities such as specific heat and susceptibility in an external field.