Differential to Single-ended conversion clipping issue
Your feeding a diff signal with a + and - voltage swing, but your power supply is single-ended, with no negative rail, so the negative part of your signal is being cut off. For this to work you need an op-amp with +/- 5 volt power rails. For single -ended power supply issues: Add a 10K ohm pot from +5 volts to ground. Remove the grounded end of R2 and connect it to the wiper of the pot. This will provide a positive offset and shift the signal up ward. If it clips on the + 5 volt rail then reduce the values of both R2's by 1/2. Over time you can fine-trim R2 for maximum size without clipping.