LCDs are measured diagonally, regardless of aspect ratio. But it's different from a picture tube's diagonal measurement.
An LCD is measured diagonally from diagonally opposite extreme corner pixels. It's a very straightforward measurement.
CRTs (picture tubes, in monitors or TV sets) are also measured diagonally, but it's the GLASS, not the picture, that is measured. So the measurement is larger than the diagonal measurement of the largest possible image, often by about 2 inches. Consequently, a 17" LCD has about the same image size as a 19" CRT. Since the thickness of the glass and the useable image area can vary, two picture tubes of the same size may have slightly different maximum image sizes. And picture tubes also "underscan", so the image size actually seen is usually smaller than the maximum possible image size even on the same tube.