ediff displays gibberish output

[Leo]

Please write in English if possible, because the Emacs maintainers
usually do not have translators to read other languages for them.

Your bug report will be posted to the address@hidden mailing list.

Please describe exactly what actions triggered the bug
and the precise symptoms of the bug:

    How to reproduce:
      1. save the attachments to file1.txt and file2.txt
      
      2. M-x ediff RET and choose file1.txt file2.txt respectively
      
      3. Type 'D' in ediff panel window and you see the difference
         output is gibberish as shown in the screenshot.

file1.txt
Description: file1.txt

file2.txt
Description: file2.txt

If Emacs crashed, and you have the Emacs process in the gdb debugger,
please include the output from the following gdb commands:
    `bt full' and `xbacktrace'.
If you would like to further debug the crash, please read the file
/opt/free.APPS/emacs/share/emacs/23.0.0/etc/DEBUG for instructions.


In GNU Emacs 23.0.0.3 (i686-pc-linux-gnu, GTK+ Version 2.8.20)
 of 2006-11-22 on Fedora
X server distributor `The X.Org Foundation', version 11.0.70000000
configured using `configure '--prefix=/opt/free.APPS/emacs' '--with-gtk' 
'--with-freetype' '--with-xft' '--enable-font-backend' '--with-pop=yes' 
'--enable-locallisppath=/opt/share/emacs/site-lisp:/usr/local/share/emacs/site-lisp:/usr/share/emacs/site-lisp'
 '--without-xim' 'CFLAGS=-O2 -march=pentium-m -pipe -fomit-frame-pointer''

Important settings:
  value of $LC_ALL: nil
  value of $LC_COLLATE: nil
  value of $LC_CTYPE: nil
  value of $LC_MESSAGES: nil
  value of $LC_MONETARY: nil
  value of $LC_NUMERIC: nil
  value of $LC_TIME: nil
  value of $LANG: en_GB.UTF-8
  locale-coding-system: utf-8-unix
  default-enable-multibyte-characters: t

Major mode: Emacs-Lisp

Minor modes in effect:
  erc-page-mode: t
  erc-services-mode: t
  erc-autojoin-mode: t
  erc-button-mode: t
  erc-ring-mode: t
  erc-pcomplete-mode: t
  erc-track-mode: t
  erc-match-mode: t
  erc-fill-mode: t
  erc-stamp-mode: t
  erc-netsplit-mode: t
  erc-smiley-mode: t
  erc-scrolltobottom-mode: t
  paredit-mode: t
  dired-omit-mode: t
  recentf-mode: t
  icomplete-mode: t
  show-paren-mode: t
  delete-selection-mode: t
  global-auto-revert-mode: t
  display-time-mode: t
  shell-dirtrack-mode: t
  tooltip-mode: t
  tool-bar-mode: t
  mouse-wheel-mode: t
  menu-bar-mode: t
  file-name-shadow-mode: t
  global-font-lock-mode: t
  font-lock-mode: t
  blink-cursor-mode: t
  global-auto-composition-mode: t
  auto-composition-mode: t
  auto-compression-mode: t
  line-number-mode: t
  transient-mark-mode: t

Recent input:
<right> <backspace> <backspace> <backspace> <backspace> 
1 6 6 9 , 2 5 <right> <right> <right> <right> <right> 
<right> <right> <right> <right> <right> <right> <right> 
<right> <right> <right> <right> <right> <right> <right> 
<down> <left> <up> <up> <right> <right> <backspace> 
2 <down> <down> <left> <left> <left> <left> <backspace> 
<backspace> <backspace> 1 6 6 9 , 2 5 <down> C-e <return> 
<return> <help-echo> <switch-frame> <help-echo> <help-echo> 
<help-echo> <help-echo> <tool-bar> <kill-buffer> q 
y C-x 1 C-x k <return> C-x k <return> C-x k <return> 
C-x C-b q <help-echo> <switch-frame> <switch-frame> 
<switch-frame> <switch-frame> <help-echo> M-x r e p 
o r <tab> b u <tab> <return>

Recent messages:
Buffer A: Processing difference region 0 of 2
Buffer B: Processing difference region 0 of 2
Processing difference regions ... done
Mark set [3 times]
Auto-saving...done
Mark set
Quit this Ediff session? (y or n) 
Updating buffer list...done
Commands: m, u, t, RET, g, k, S, D, Q; q to quit; h for help
Loading emacsbug...done