fixes #567 diff non-unicode encoding missmatch

- now uses safe_unicode ass all other parts of the system

rhodecode/lib/diffs.py

@@ -44,6 +44,7 b' from rhodecode.lib.vcs.nodes import File'
 from rhodecode.lib.vcs.backends.base import EmptyChangeset
 from rhodecode.lib.helpers import escape
 from rhodecode.lib.utils import make_ui
+from rhodecode.lib.utils2 import safe_unicode
 
 
 def wrap_to_table(str_):
@@ -214,7 +215,7 b' class DiffProcessor(object):'
                 self.adds += 1
             elif l.startswith('-') and not l.startswith('---'):
                 self.removes += 1
-            return l.decode('utf8', 'replace')
+            return safe_unicode(l)
 
         output = list(diffiterator)
         size = len(output)

rhodecode/lib/vcs/utils/diffs.py

@@ -13,6 +13,7 b' from mercurial.match import match'
 
 from rhodecode.lib.vcs.exceptions import VCSError
 from rhodecode.lib.vcs.nodes import FileNode, NodeError
+from rhodecode.lib.vcs.utils import safe_unicode
 
 
 def get_udiff(filenode_old, filenode_new, show_whitespace=True):
@@ -149,7 +150,7 b' class DiffProcessor(object):'
                 self.adds += 1
             elif l.startswith('-') and not l.startswith('---'):
                 self.removes += 1
-            return l.decode('utf8', 'replace')
+            return safe_unicode(l)
 
         output = list(diffiterator)
         size = len(output)