Same problem here. After updating xorg-x11 some config-files had to be changed (unfortunately I don't know which). dispatch-conf gave me the error "diff3: subsidiary program `/usr/bin/diff' failed (exit status 2)". I re-emerged xorg and no config-files had to be updated. So I think dispatch-conf was successful the first time. "diff --help" says "Exit status is 0 if successful, 1 if conflicts, 2 if trouble" (but what kind of trouble???).
The files updated after xorg were binary. That is the reason for the error. The files were updated after dispatch-conf was run so they did not need anything else to be done.