Unfortunately, the suggestion above did not work.
On the Files tab, I clicked on the IF() button (which BTW is very difficult to see / make out on my MacBook Pro 15 with a Retina display).
I then clicked on Options and saw that Source Diff was turned off. I turned on three other options (expand tabs, ignore trailing spaces, do not compare newline chars) and then, clicked on OK.
When I restarted DIFFzilla, SourceDiff was turned back on by default and the three other options listed above were turned off.