The surrogate escape approach embodies the 3.x recommendation:
decode bytes to strings, manipulate strings, encode strings to bytes.
It also makes it possible to wrap the existing context/unified_diff functions, without touching them, with a simple 12 line function. Function bytes_diff avoids the complexities of mixing and unmixing strings and bytes that remain in Greg's latest patch.

I recommend the following: replace the simple test in the attached bytes_diff.py with Greg's unittest-based tests and adjust the __name__ == '__main__' incantation accordingly. Next upload to pypi to make it available to all 3.1-3.3 users. Then, after some minimal field testing, add the utility wrapper function to 3.4 difflib.  These steps would make moot for difflib the sub-issue of whether the 3.x design is a bug fixable in bugfix releases. We could even add a reference to the pypi module in the 3.2 and 3.3 docs.