An explanatory computational model is developed of the contiguous areas of retinal capillary loss which play a large role in diabetic maculapathy and diabetic retinal neovascularization. Strictly random leukocyte mediated capillary occlusion cannot explain the occurrence of large contiguous areas of retinal ischemia. Therefore occlusion of an individual capillary must increase the probability of occlusion of surrounding capillaries. A retinal perifoveal vascular sector as well as a peripheral retinal capillary network and a deleted hexagonal capillary network are modelled using Compucell3D. The perifoveal modelling produces a pattern of spreading capillary loss with associated macular edema. In the peripheral network, spreading ischemia results from the progressive loss of the ladder capillaries which connect peripheral arterioles and venules. System blood flow was elevated in the macular model before a later reduction in flow in cases with progression of capillary occlusions. Simulations differing only in initial vascular network structures but with identical dynamics for oxygen, growth factors and vascular occlusions, replicate key clinical observations of ischemia and macular edema in the posterior pole and ischemia in the retinal periphery. The simulation results also seem consistent with quantitative data on macular blood flow and qualitative data on venous oxygenation. One computational model applied to distinct capillary networks in different retinal regions yielded results comparable to clinical observations in those regions.