Hate to harp, but the ratio in Oblivion in difficulties went from -1000 to normal to +1000. That's a 1:1 million ratio difference that they allowed for. Are you even at 2:1?
IIRC, Oblivion's difficulty was 6:1 in favour of the player on the easiest setting (i.e. enemies dealt a sixth of the damage; not sure if this was just enemies or all other actors) to 6:1 in favour of enemies at the hardest, i.e. they dealt six times your damage.
I normally left it in the middle which seemed balanced enough except for the "difficult teen" levels where I had to move it halfway to the easy end. Though as I've said before, I'm not terribly good at combat.
Of course once FCOM came along all bets were off! Though that was nothing to do with difficulty but rather levelling.
