diff --git a/docs/changelog.rst b/docs/changelog.rst
index 5a0834f3fe9..c97d994255d 100644
--- a/docs/changelog.rst
+++ b/docs/changelog.rst
@@ -87,6 +87,8 @@ Detailed list of changes
 
 - kitten @: Fix a regression connecting to TCP sockets using plain IP addresses rather than hostnames (:iss:`7794`)
 
+- diff kitten: Fix a regression that broke diffing against remote files (:iss:`7797`)
+
 0.36.1 [2024-08-24]
 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
 
diff --git a/kittens/diff/main.go b/kittens/diff/main.go
index 91005bfb8f2..e36c42c335a 100644
--- a/kittens/diff/main.go
+++ b/kittens/diff/main.go
@@ -58,7 +58,7 @@ func get_ssh_file(hostname, rpath string) (string, error) {
 	for strings.HasPrefix(rpath, "/") {
 		rpath = rpath[1:]
 	}
-	cmd := []string{ssh.SSHExe(), hostname, "tar", "-c", "-f", "-"}
+	cmd := []string{ssh.SSHExe(), hostname, "tar", "--dereference", "--create", "--file", "-"}
 	if is_abs {
 		cmd = append(cmd, "-C", "/")
 	}
diff --git a/tools/utils/tar.go b/tools/utils/tar.go
index 1d6ad996383..8715c84baab 100644
--- a/tools/utils/tar.go
+++ b/tools/utils/tar.go
@@ -48,6 +48,7 @@ func ExtractAllFromTar(tr *tar.Reader, dest_path string, optss ...TarExtractOpti
 		var hdr *tar.Header
 		hdr, err = tr.Next()
 		if errors.Is(err, io.EOF) {
+			err = nil
 			break
 		}
 		if err != nil {
@@ -70,6 +71,9 @@ func ExtractAllFromTar(tr *tar.Reader, dest_path string, optss ...TarExtractOpti
 			}
 		case tar.TypeReg, tar.TypeRegA:
 			var d *os.File
+			if err = os.MkdirAll(filepath.Dir(dest), 0o700); err != nil {
+				return
+			}
 			if d, err = os.Create(dest); err != nil {
 				return
 			}
@@ -82,6 +86,9 @@ func ExtractAllFromTar(tr *tar.Reader, dest_path string, optss ...TarExtractOpti
 				return
 			}
 		case tar.TypeLink:
+			if err = os.MkdirAll(filepath.Dir(dest), 0o700); err != nil {
+				return
+			}
 			if err = os.Link(hdr.Linkname, dest); err != nil {
 				return
 			}
@@ -89,6 +96,9 @@ func ExtractAllFromTar(tr *tar.Reader, dest_path string, optss ...TarExtractOpti
 				return
 			}
 		case tar.TypeSymlink:
+			if err = os.MkdirAll(filepath.Dir(dest), 0o700); err != nil {
+				return
+			}
 			if err = os.Symlink(hdr.Linkname, dest); err != nil {
 				return
 			}