Ruby string representation
"foo \303\255 bar".gsub(/(\d{3})+/) do |match|
  match[1..-1].split("\").map{ |octet| octet.to_i(8) }.pack("c*")
end.force_encoding("UTF-8")

"foo \303\255 bar".gsub(/(\d{3})+/) { |m| eval('"' + m + '"') }

# encoding: utf-8

Encoding.default_external = Encoding::UTF_8
Encoding.default_internal = Encoding::UTF_8