I'd like to add that I was completely wrong about my issues. I thought it was my slow CPU miners, but it can't be because as everyone else said, the diff should have just increased variance, but I switched to Middlecoin (which is locked at 1024 diff) and I'm getting no REJECTED shares. So sorry for that confusion, but I only seem to have this problem on Wafflepool, which is too bad. I've tried multiple Wafflepool servers, but just get continuous REJECTED shares. I'll keep trying, I really want to mine here. Thanks to all for the information and suggestions.
Definitely sounds like something wrong with your stratum proxy. Are you using the stratum CPU miner, or longpoll?
I'm using minerd miners (no default stratum support) connected to a central stratum proxy. That stratum proxy connects to a headless linux VPS forwarding all traffic to whatever pool I choose. All I did was change the IP on the VPS to point to Middlecoin instead of Wafflepool and all of my rejects went away. So something else is going on, because my miner configurations haven't changed at all since I started mining LTC a year ago. I guess I was just having connection issues to just Wafflepool.