In a project where some of the files contains ^M as newline separators. Diffing these files are apparently impossible, since git-diff sees it as the entire file is just a single line.

How does one diff with the previous version?

Is there an option like "treat ^M as newline when diffing" ?

prompt> git-diff "HEAD^" -- MyFile.as 
diff --git a/myproject/MyFile.as b/myproject/MyFile.as
index be78321..a393ba3 100644
--- a/myproject/MyFile.cpp
+++ b/myproject/MyFile.cpp
@@ -1 +1 @@
-<U+FEFF>import flash.events.MouseEvent;^Mimport mx.controls.*;^Mimport mx.utils.Delegate
\ No newline at end of file
+<U+FEFF>import flash.events.MouseEvent;^Mimport mx.controls.*;^Mimport mx.utils.Delegate
\ No newline at end of file
prompt>

UPDATE:

now I have written a script that checks out the latest 10 revisions and converts CR to LF.

require 'fileutils'

if ARGV.size != 3
  puts "a git-path must be provided"
  puts "a filename must be provided"
  puts "a result-dir must be provided"
  puts "example:"
  puts "ruby gitcrdiff.rb project/dir1/dir2/dir3/ SomeFile.cpp tmp_somefile"
  exit(1)
end

gitpath = ARGV[0]
filename = ARGV[1]
resultdir = ARGV[2]

unless FileTest.exist?(".git")
  puts "this command must be run in the same dir as where .git resides"
  exit(1)
end

if FileTest.exist?(resultdir)
  puts "the result dir must not exist"
  exit(1)
end
FileUtils.mkdir(resultdir)

10.times do |i|
  revision = "^" * i
  cmd = "git show HEAD#{revision}:#{gitpath}#{filename} | tr '\\r' '\\n' > #{resultdir}/#{filename}_rev#{i}"
  puts cmd 
  system cmd
end