Comment 3 for bug 198728

Displaying it as
- one line
+ another line
+ modified one line

Is the standard way to do unified diffs. I think it starts to get into the realm of AI to figure out which lines really should be grouped together and which ones shouldn't.

There are certainly times when I've wished things could be grouped differently, but I've had that with every tool I've tried. (vimdiff, diff, kdiff3)