I was getting some really odd problems with running latexdiff for some paper revisions. The first few pages would build fine, and then all of the remaining pages would be marked up as new insertions. It turns out that the problem was caused by latexdiff only working correctly on files with unix style line endings. So if you have a file that doesn’t work properly, try running dos2unix on the file to correct the endings and then try again.

I also had problems with diffing references, where changed inline citations would stretch off the page. The solution is to use latexdiffcite, a python tool that fixes this issue. See this link for more details.