I have to run the numbers, but retargeting difficulty with a time component will create vulnerability to a TW(Time Warp) attack. Just doing a quick simulation here tells me that a TW attack would be successful with less than 10% of the total nethash.
I could very easily create a side chain by manipulating timestamps on the blocks to appear to have 150sec block times with minimal hash-rate that could be merged into the main chain at any point even if you implemented a centralised network time server because the blocks are no longer comfirmed by proof of work, but by time stamp.
As I see it, you would need very little nethash for a successful TW attack.
Thanks for stepping in. But I get the impression you are talking about the example I gave with 149.99 seconds reject? If thats the case, yep, doesn't work. But leaving everything as is, exept for the fact you reject the first N seconds - in my example 75 seconds - does not change the POW. The diff will lower the same percentage you reject blocks because it has to compensate those missing fast blocks and get the system to an average of 150 sec blocktime. I looked at it from different angles and can't find an exploit other then the ones that also are present in the current system. One thing is different though, the blockmass is less because the diff is less so that can open up an exploit. But I don't know exactly how the timewarp is fixed in DGW2 & 3 - read was too lazy to dig into the code - so that has to be checked.