Diagram algebras (for example, graded braid groups, Hecke algebras and Brauer algebras) arise as tensor power centralizer algebras, algebras of commuting operators for a Lie algebra action on a tensor space. This work explores centralizers of the action of a complex reductive Lie algebra g on tensor space of the form M ⊗ N ⊗ V ⊗k . We define the degenerate twoboundary braid algebra Ᏻ k and show that centralizer algebras contain quotients of this algebra in a general setting. As an example, we study in detail the combinatorics of special cases corresponding to Lie algebras gl n and sl n and modules M and N indexed by rectangular partitions. For this setting, we define the degenerate extended two-boundary Hecke algebra Ᏼ ext k as a quotient of Ᏻ k , and show that a quotient of Ᏼ ext k is isomorphic to a large subalgebra of the centralizer. We further study the representation theory of Ᏼ ext k to find that the seminormal representations are indexed by a known family of partitions. The bases for the resulting modules are given by paths in a lattice of partitions, and the action of Ᏼ ext k is given by combinatorial formulas.