  Decades after the beginning of its FU Orionis-type outburst, V346 Nor
unexpectedly underwent a fading event of $\Delta{}K$ = 4.6 mag around 2010. We
obtained near-infrared observations and re-analysed data from the VISTA/VVV
survey to outline the brightness evolution. In our VLT/NaCO images, we
discovered a halo of scattered light around V346~Nor with a size of about 0.04
arcsec (30 au). The VISTA data outlined a well-defined minimum in the light
curve at late 2010/early 2011, and tentatively revealed a small-amplitude
periodic modulation of 58 days. Our latest data points from 2016 demonstrate
that the source is still brightening but has not reached the 2008 level yet. We
used a simple accretion disk model with varying accretion rate and
line-of-sight extinction to reproduce the observed near-infrared magnitudes and
colors. We found that before 2008, the flux changes of V346 Nor were caused by
a correlated change of extinction and accretion rate, while the minimum around
2010 was mostly due to decreasing accretion. The source reached a maximal
accretion rate of ${\approx}10^{-4} M_{\odot}$ yr$^{-1}$ in 1992. A combination
of accretion and extinction changes was already invoked in the literature to
interpret the flux variations of certain embedded young eruptive stars.
