So, having been frustrated with the difference in difficulty between Normal and Hard I decided to do something about it! I have modded the game to create my own difficulty level which someone of my ability could find fun (Normal is too easy and Classic is too hard). There are already lots of mods available for Xcom but I didn't want anything radical, so I decided to make minor adjustments.
So, in basic terms the differences Hard/Classic gives are as follows:
* Base costs up
* Tougher Country panic settings
* Many alien units have 1 or 2 more hp
* Improved alien AI
* Marines begin with 1 hp less
* Almost all aliens have extra 10% hit AND 10% crit
All I did to my settings is remove the two differences in difficulty above that are in bold. I'm still up against improved AI with aliens with more hp, except they don't get to 'cheat' and 1 shot me so much. If you think you're in the same boat I really recommend doing the same, or I could upload my edited exe file to dropbox or something to share (I have no idea if this is allowed on this forum or not)?
I've started a new campaign under the above conditions and it feels perfect for my ability level. Much harder than standard Normal but I am now completing missions (albeit with 1 or 2 deaths each time). Woot!