For interest, the same connected to the displace and not the diffuse. And results were the same for me with a Corona Bitmap, the Mat Editor is "not to be believed" ;) This will be because the blurring happens over the size of the mat editor preview, vs. over the size of the bitmap in the render (the image is first projected onto whatever size it is occupying in a render in either the preview window or the scene, and then THAT is blurred, not the source image). As you make the mat editor preview larger, more detail begins to be seen, but it's still not large enough to duplicate what is happening in the 3D scene. Meantime, blurring in Photoshop of course happens across the whole source bitmap and isn't dependent on the size of the image inside the rendered area, different sort of blurring altogether. At least, that's my guess :)