Like it has been mentioned, the discarded number is due to the S3's high queue (I think it is 1046), but I am meant to believe does NOT affect your mining. you can change this to a lower number to get less discards.
This particular solo pool, I have noticed, takes a while to "settle" down to your appropriate hashing speed to assign a relevant Diff, so a few minutes is not long enough to reach conclusions.
OK, I will wait and check the stats after few hours ..