I found the actual reason why it was broken... This is WRONG!:

        $cipher->start('decrypting');
        while(read(IN, $buffer, 1024)) {
            if($cat_it) {
                print $cipher->decrypt($buffer);
            } else {
                print OUT $cipher->decrypt($buffer);
            }
        }
        print OUT $cipher->finish;
[download]

This isn't:

        $cipher->start('decrypting');
        while(read(IN, $buffer, 1024)) {
            if($cat_it) {
                print $cipher->crypt($buffer);
            } else {
                print OUT $cipher->crypt($buffer);
            }
        }
        print OUT $cipher->finish;
[download]