Difficulty Sel : 512 --Current difficulty:512
It's like whatever you set is what it's told to always run at
I'm not sure if newer dragon miners have fixed it, but I know all the early ones were a hard setting. If the pool changed the difficulty, the miner would ignore it. Many early users were complaining about this because dragon miners on every pool were showing only a fraction of the speed they should. This was because the pools were only crediting them for diff 2-32 (depending on the pool default), but the miner was only sending 1024+.
Unless firmware update would fix everything. Not even sure how to do that safely or know if its needed.
Setting the diff to 1024 on both ends will guarantee the problem doesn't happen. 512 is unlikely to cause a problem, other than the one I mentioned where a burst of luck could bump you to 1024, at which point 50% of your submissions get tossed under 'Unknown' rejects. You would still get full credit for your mining though (you'd be submitting twice as many shares since you're set to 512, and roughly half would meet the 1024, getting credited for 2x512, while the other half would be rejected for not meeting 1024).