[MERGE] Refactor diffing

[Aaron Bentley]

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Robert Collins wrote:

> I think its a solid improvement as-is. Lets get it in.

Looks like I just missed the cutoff...

> If you keep working on it, I think extra's being factories would be a
> good thing to do, but as a separate, later patch.

...and just as well, if we're going to change the public API.

Aaron

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