Apparently there was a glitch with something involved in skills that got reset or replaced on act change.

That is weird about the sword. I vaguely recall something similar, but I may just be remembering a couple other issues: in some cases in an unpatched game there could be a problem if the DK was not equipped with a sword during the first act transition, and I briefly though I lost the lucky cap from the talking skull, until I realized that unique and set items get renamed on act change (the stats stay the same).