Disconnected recordset as far as I know refers to a recordset populated manually, not from database, e.g.used as multi dimensional array or kind of hash table.
So what you have is not a disconnected recordset since it's being populated from database, and by disposing its connection you just cause your code to not work properly.
Since you already have Set discConn = Nothing
in the code you don't have to set it to nothing via the recordset or command objects, it's the same connection object.
To sum this all up, you should indeed get rid of tho following lines in your code:
Set .ActiveConnection = Nothing ' Disconnect!
discRS.Close() ' <=== Issue!!!
Set discRs = Nothing
Then to prevent memory leaks or database lock issues, you should close and dispose the recordset after actually using it in the code using the function e.g.
Dim oRS
Set oRS = GetDiscRS("mydatabase", "SELECT * FROM MyTable", Array())
Do Until oRS.EOF
'process current row...
oRS.MoveNext
Loop
oRS.Close ' <=== Close
Set oRS = Nothing ' <=== Dispose
To avoid all this hassle you can have the function return "real" disconnected recordset by copying all the data into newly created recordset. If relevant let me know and I'll come with some code.