Difficulty is not being saved in the options menu.

Steps to reproduce bug:
1. set your difficulty to normal using options menu.
2. change difficulty using /difficulty extreme
3. go to options menu to verify your difficulty (it should say extreme)

Yes, there's a problem with the difficulty slider (or at least there was pre-patch, I havent encountered it post-patch myself) - unless this is a separate issue and I'm not understanding what else you might be saying is wrong specifically.

Sometimes when you set your difficulty and enter an instance (or log out on a specific difficulty then back in , supposedly on the same difficulty), the difficulty stayed on the previous setting or vice versa. The only way to work around it was/is to set your difficulty up then down, or down then up, while still in the menu, return to game instead of using "esc" and resetting (or doing it before you actually went into an instance for the first time).

A bunch of us talked about it here and some of us got in the habit of just "jogging" our difficulty when we first logged on to make sure it wasn't "stuck" on the wrong level.

Whatever the slider says in the menu, if you type in your difficulty it will work- at least it's never failed for me.

lol, oops forgot that part....yeah if you do it "manually" it works fine. I always forget about the manual command.