git diff and git difftool do nothing and give no output
OK, simple answer. The default behaviour for git diff is to show the all files which have been modified but not staged. If you have no modified files then there is no output.
git difftool uses the output of git diff so if there's no output from the previous command git difftool will do nothing as well.
Solution: Change some files but don't stage them, re run the commands. If there are problems with your config file they will show up then.