Right Answer is:
Let us understand the meaning of the given words :-
Lie = to be, remain, or be kept in a specified state.
Lay = to put (something) down gently or carefully.
“The difficulty” is the subject of the sentence but it cannot be the doer thus it cannot perform any action or put something. Thus, an intransitive verb or its form should be used. But at the beginning of the sentence “at present” is given thus “lay” cannot be used thus “lies” should be used.
Hence, option C is the correct answer.