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I have two very different application context files. First, I use the internal diff tool and then I use the external diff (OS X). The diff result is very different for those two cases.
Created attachment 145058 [details] Internal Diff
Created attachment 145059 [details] External Diff
most likely caused by ignoring white-spaces with the internal diff tool. Go to Tools -> Options -> Misc -> Diff and disable all Ignore... options in Internal Diff area. If you still get different results, please send me the two files and i'll try myself and debug it.