the first stage takes bit n+1 of the input stream, then XORs it with n, and then stores n,n+1 in the output. then it XORs n+2 and n+1, stores n,n+1,n+2, then n+3 XOR n+2, store n,n+1,n+2,n+3...
then it takes the whole thing and n xor n+1, n+1 xor n+2...
thats the hash function
the digest function takes that hash, breaks it into 128 bit chunks, appends the first chunk to the last, cuts the last to 128 bits, then chunk by chunk it folds them down
the folding process goes as follows: take first line and second line, xor each pair of bits, then to that xord line, do the same to the next line
until all the lines are folded down
then then it takes the whole thing again and n xor n+1, n+1 xor n+2...
then spits it out as a hex string