I just went into options and noticed my difficulty settings were lower than I had set them. Did the game do this automatically thanks to me getting defeated a few times?
I did open a saved game from the demo that had lower settings now I think of it - would that change the settings so they stayed lower when I reloaded my new higher difficulty game?
ie. You have a new game, but the difficulty is too high for you to fight, unlike your older, much more equipped save. So, you do that, then switch back to that after a while, but everything seems too easy. Checking the options, it was the same as you set them on your newer save.