This conversation has been merged. Please reference the main conversation: Photoshop: Liquify Tool moves the layer down while working on it, making horizontal guides useless
However, if the layer you are Liquifying has a larger width or height (or both) than the document canvas, then the Liquify working area (canvas) is expanded so you can see the entire layer. This leads to incorrect positioning of the guides in the Liquify window: instead of relative to the document canvas 0,0 point, they are positioned relative to the expanded Liquify working area (canvas) 0,0 point, so they are no longer where you want them.
This issue is present in the Windows version of Photoshop CC 2015.1.1 and I believe it was present ever since the Show Guides option was added to the Liquify window.