How do disk encryption programs solve the "IV problem"? I was reading a paper on the "elephant diffuser" used in BitLocker and it got me wondering how other systems (e.g. TrueCrypt before it shutdown) solved the problem the elephant diffuser was meant to solve; namely that there isn't enough space on a disk block to store an IV.  Where is the IV stored in other systems or do they have alternative solutions?
The problem is not to store an IV but to store an authentication tag.

I don't know about any other products that solve this problem in a way similar to BitLocker. LUKS uses XTS by default, and TrueCrypt supported LRW and XTS, among other modes. Neither of these two modes provide any diffusion. Information about various modes for disk encryption is available here.