Question about DR??
You only need four things for your monthly. Just skip the sonic periscope one.
I sincerely doubt you experienced DR in this situation. More like bad RNG which can happen to anyone.
My experience with dungeon chest loot is usually of obtaining blue or green items with some copper.
From guildwiki:
Diminishing returns, abbreviated DR, is anti-farm code implemented to prevent bots and exploits from disrupting the economy and gaining an unfair advantage over legitimate players.1 DR is character-based in all areas except dungeons, where it is account-based and shared between characters. It affects most activities that have potential for abuse. Diminishing returns on loot is not intended to affect the average player, i.e. very few players will experience it during normal play. DR accrues in “points”, which will lead to decreases in the benefits for the relevant activity, such as drop rate or rewards.
Unlike map boss events, dungeon chests are not fixed yet. I feel your pain. I run dungeons a lot and most of the time I leave with just a couple of blues. However dungeons are fun for me so I decided that loot doesn’t matter. Still though, I wish I could get a yellow or so in dungeons once in a while