I have a slight variation of this bug.
When I zone to WoE, I can see everything. If/when I die, on 2 of my 3 computers, I can no longer see Digg (but only Digg). I log out, and back in, and he is back.
I can still melee/attack him while he's "invisible", however all spell icons are red because it doesn't think he's in range.
An annoying bug, however it's not a life altering bug for me... I don't have many common elements as to why it's working/not working on some of my PCs.
Working: Vista64 - graphics as low as possible - ATI card
Not working:
Vista64 - NVidia
XP32 - NVidia
Both with graphics as low as possible
The two NVidia's are extremely different cards (about 2 years apart).