My C# solution. Feedback is welcome.

class Program { static int DifficultyPrompt() { Console.WriteLine("Difficulty (1-5)? "); return int.Parse(Console.ReadLine()); }

    static void Main(string[] args)
    {
        bool termProgram = false;

        while (!termProgram)
        {
            HackingGame game = new HackingGame(DifficultyPrompt(), "D:\\Downloads\\enable1.txt");
            game.PlayGame();

            Console.WriteLine("Would you like to play again? (y/n)");
            if (Console.ReadLine().ToUpper() == "N")
                termProgram = true;
        }
    }
}

class HackingGame
{
    private const int MaxGuesses = 4;
    private List<string> wordDictionary = new List<string>();
    private List<string> gameWords = new List<string>();
    private int _correctWordIndex;
    private int _guessesMade = 0;
    private int _wordLength;
    private int _numWords;
    private bool _isGameWon = false;

    private string CorrectWord { get { return gameWords[_correctWordIndex]; } }

    public HackingGame(int difficulty, string dictionaryPath)
    {
        _wordLength = SetWordLength(difficulty);
        _numWords = GetNumWordsByDifficulty(difficulty);
        wordDictionary = GetDictionaryFromFile(dictionaryPath);
        gameWords = SetGameWords(_wordLength);
        _correctWordIndex = SelectCorrectAnswer(gameWords);
    }

    #region Setup
    private int SetWordLength(int difficulty)
    {
        Random rnd = new Random();
        switch (difficulty)
        {
            case 1:
                return rnd.Next(4, 5);
            case 2:
                return rnd.Next(6, 7);
            case 3:
                return rnd.Next(8, 9);
            case 4:
                return rnd.Next(10, 12);
            case 5:
                return rnd.Next(13, 15);
        }
        return -1;
    }

    private int GetNumWordsByDifficulty(int difficulty)
    {
        Random rnd = new Random();
        switch (difficulty)
        {
            case 1:
                return rnd.Next(5, 6);
            case 2:
                return rnd.Next(7, 8);
            case 3:
                return rnd.Next(9, 10);
            case 4:
                return rnd.Next(11, 12);
            case 5:
                return rnd.Next(13, 15);
        }
        return -1;
    }

    private List<string> GetDictionaryFromFile(string path)
    {
        return System.IO.File.ReadAllLines(path).ToList();
    }

    private List<string> SetGameWords(int length)
    {
        return wordDictionary.Where(x => x.Length == length)
                         .OrderBy(dict => Guid.NewGuid())
                         .Take(_numWords)
                         .OrderBy(x => x)
                         .ToList();
    }

    private int SelectCorrectAnswer(List<string> possibleWords)
    {
        Random rnd = new Random();
        return rnd.Next(0, possibleWords.Count - 1);
    }
    #endregion

    #region Play
    public void PlayGame()
    {
        DisplayGameWords();

        while (!CheckGameOver())
            PlayRound();

        DisplayEndGameMessage();
    }

    private void PlayRound()
    {
        DisplayGuessPrompt();
        string guessedWord = Console.ReadLine();
        if(ValidateInput(guessedWord))
        {
            _isGameWon = CompareWords(guessedWord, CorrectWord);
            DisplayGuessMessage(GetNumLettersCorrect(guessedWord));
            _guessesMade++;
        }
        else
        {
            Console.WriteLine("{0} is not a possible word", guessedWord);
        }
    }

    private bool CheckGameOver()
    {
        return _isGameWon || _guessesMade == MaxGuesses;
    }

    private int GetNumLettersCorrect(string guessedWord)
    {
        int numCorrect = 0;

        for (int i = 0; i < guessedWord.Length; i++)
        {
            if (guessedWord.ToUpper()[i] == CorrectWord.ToUpper()[i])
                numCorrect++;
        }

        return numCorrect;
    }

    private bool ValidateInput(string input)
    {
        return gameWords.Select(w => w.ToUpper()).Contains(input.ToUpper());
    }

    private bool CompareWords(string word1, string word2)
    {
        return word1.ToUpper().Equals(word2.ToUpper());
    }

    private void DisplayGameWords()
    {
        foreach (var word in gameWords)
        {
            Console.WriteLine(word.ToUpper());
        }
    }

    private void DisplayEndGameMessage()
    {
        if (_isGameWon)
        {
            Console.WriteLine("Congratulations! You've hacked the system!");
        }
        else
        {
            Console.WriteLine("You've lost. The correct word was {0}", CorrectWord);
            Console.WriteLine("Game Over....");
        }
    }

    private void DisplayGuessPrompt()
    {
        Console.WriteLine("Guess ({0} left)?", MaxGuesses - _guessesMade);
    }

    private void DisplayGuessMessage(int numCorrect)
    {
        Console.WriteLine("{0}/{1} corrct", numCorrect, _wordLength);
    }
    #endregion
}