Solution: It is known that when Ma Xiaotiao worked out a formula for subtracting three digits from three digits, he wrote 3 in the minuend digits as 8 and 0 in the minuend decimal digits as 6, so the difference was 202.

Correct difference = error difference -(8-3)-(6-0)× 10

=202-(8-3)-(6-0)× 10

=202-5-60

= 137

A: The correct difference is 137.