The culprit turns out to be our old friend Busybox again.
I built Puppy with the 'diff' DEB, which has become a dummy package as the proper package is now 'diffutils'. Consequently Puppy alpha2 is using the Busybox 'diff'.
This comes as a surprise to me, but the output format of the Busybox 'diff' is totally different to that of the diffutils 'diff'. Which is weird, because I seem to recall using diff in older versions of Busybox, and the format was the same as the full version of diff.
It seems that the Busybox diff is defaulting to the "unified" output format. This is supposed to be only done if the "-u" option is used.
Anyway, the problem is solved by installing the proper diff:
Alpha3 will have this fix.
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