I'm having the same problem, and the three solutions don't work for me.
In all the three solutions (and even the other thread I started with
your reply windo diffthis) doesn't work.
What happens is that one window folds the complete file to one line.
The other window keeps the file open as it was.

Is this normal vim diffthis behaviour?
I was expecting somekind of Winmerge behaviour.

Rgds,
Eric

I. To diff one file already being edited with another file not being edited:

        1. make the file already being edited current (let's say foo.txt)
        2. :vertical diffsplit bar.txt

II. To diff two files already being edited:

        1. make one file current
        2. :diffthis
        3. make the other file current
        4. :diffthis
        5. (Optional) Rearrange the windows (using ^W commands) to place them
side-by-side.

III. To diff (in an existing Vim, but in new windows) two files not being edited

        1. :bot new foo.txt
        2. :vert diffsplit bar.txt

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