I have had a couple of times had items I have tried to pick up just disappere off the ground.

Has anyone seen this?

Yes, its something that can happen with ground-spawned items, especially in multiplayer games.

I'd heard that this was a lag issue back in the day... based upon two people trying to grab the same item simultaneously. But I've never encountered it myself.

That's one possible scenario, but I also had it happen in solo multiplayer games I hosted myself.

I have never seen this, I have been playing for a long time.

Sure, it is common, usually if you play with somebody (multiplayer) - the game is running on both od your PCs, not on Battle.Net. BN is only for connecting you with others and some chat channels, game loby.
So when you picking up item this information is also sended to other players, and your Character paper doll and items you have in inventory is also synchronized on other player's computers.
Problem is when there is desynchronization (lag). Then information about it can get "stuck" in between - and you are in the same time receiving information from other players about state of items on the ground and all characters as well.
So to sum it up - it's problem with desync usually.
In some games with some players it can eat almost every item you pick from ground - so it is dangerous. Try reconnecting and rejoin to battle.net- maybe next time it will be with less desync.
Usually it just don't happen - if you got good connection, but sometimes game is acting like bugged because of it.
You should not see this often in singleplayer.

P.S.

there is also some problem with that with potions from Divine Shrine in multiplayer - but it's another thing.

im playing Single Player after just bought the game

Im losing items picked up and ive looted several cloaks that have vanished after wearing them.

is that normal in this game? to loot armor - equip it - then have it vanish from your equip slot?

If it vanishes instantly, then no, that is not normal. If it vanishes after you allow its durability to fall to 0, then yes. Repair your equipment at Griswold before it is destroyed.

kind of another problem
I bet it is about durability. In Diablo (unlike Diablo II) if your item durability went to 0 DUR, it will be destroyed.
You can see a small icon of damaged item on right side. It is yellow/gold for DUR<=5 and red for DUR <=4.
If you see this - go to Griswold and repair for gold, or you can use Warrior's repair skill - but take note! Warrior's repair skill would always decrese max durability of item.

There are few rules when item durability could be decreased, if you are interested I can write them here.
There is also way to rise max durabiliy of item, but it is also more advanced topic.

Trainers can cause wierd stuff to happen in your game. BoBaFett's does the most damage (literally).

the fact that you didn't encounter this issue earlier doesn't mean it didn't exist - it just happens in diablo

For what it is worth, you will eventually find much better jewelry. I think you are probably better off without Aguinara's Hatchet. You are not nearly deep enough to need much magic resistance yet. As an axe, the Hatchet necessarily prevents equipping a shield. Generally, the only times a character should not have a shield equipped are: (1) a rogue using a bow or (2) a mage using a staff to cast a spell. Some people will add (3) a mage using a staff for a staff-specific prefix, like Arch-Angel's. Personally, I prefer to wear an enchanted shield and give up that one extra spell level.

For optimal character performance, an axe should never be used as a weapon. It swings too slowly. As a two-handed item, an axe-wielding character will never have a shield, and so should try hard never to be adjacent to an enemy that has a melee attack.

As for your immediate problem, the only advice I can offer is to pick up items individually and slowly. If an item refuses to pick up, don't try to move any others. They will likely also become stuck. Once an item is stuck, it is very likely to vanish shortly. You might be able to recover by having the picking player leave the level, then have the remaining player pick and re-drop the items.

One other option, which requires some preparation before you lose the item, is to make a backup of your character file. If an item gets destroyed through out-of-game effects, as here, you could:

- Have the person who lost the item exit the game
- Set aside the current character file
- Restore the backup that was made before the item was lost
- Join a game with the unaffected person
- Drop the item, which exists because you are now playing an older version of the character (who also has lower experience, and is missing any items you acquired post-backup)
- Leave the game
- Replace the character file with the one from the second step
- Join the game. Your character is now the "current" version again, with all spells, experience, and recent item changes - including the unwanted loss.
- Pick up the item dropped by your earlier self.

Character files are stored in the install directory, and are named multi_N.sv, where N is a decimal number in 0-9. 0 is your first character; 1 is your second; etc.

You should probably back up these files anyway, just so you don't lose your character if your computer dies.

I can't thank you enough for this post. I played Diablo 1 in High School in 1998 and loved it. Then I went to college, life happened, marriage, kids, etc. I just got Diablo 1 again from GOG and started playing a week ago.

I'm LOVING it, the nostalgia is incredible. But I lost the Butcher's Axe on level 7, and just today I lost Arkaine's Valor and the game is almost unplayable because I'm dying so fast.

I thought the game was bugging out and losing items. Then I saw this post. Now I understand what the image is on the bottom right. It's dangerously low items! I've repaired my helmet, and I'm using tons of healing potions to make it through to the next armor drop.

I almost quit completely and then I saw this post.

THANK YOU!!!