Nice code. While playing around with different values of $s, I started losing the "H". At first I thought it was the way that I had modified the code to remove trailing whitespace and empty lines from the output. I then realized that the script was running out of DATA. I added the line "seek DATA, 0, 0 if eof(DATA)" after last; And since the seek is now used more than once, I created a subroutine to do that work. Here's my updated version:

#!/usr/bin/perl -w
($s=pop)||($s=10);($p)=@m=(0,0,1,0);$/=\1;
$r = sub {seek DATA,0,0};sub t{@m[2,3]=(0,
0);for$y(split//,$_[0]){for(2,3) {$m[$_]+=
{n=>[-1,0],s=>[1,0],e=>[0,1],w=>[0,-1]}->{
$y}->[$_-2];}}}$SIG{__WARN__}=sub{$p=!$p};
&$r;for (qw(    6   se   p 2 e    2    ne 
            2 n    5 p     e  2     s 
            8 p    n 6     ne 2     e 
            1 se 2 s 5 n 2    w 4 e 4 
            p e    2 s        3     p 
            n 8    e 4        se    1 
      s     2 sw   1 w        4     p
       se   4 e    3 p        n     8 
         s 4  e    4 n        4     s 
          7 
)) {$_[0]=$_;tr/nsew//?&t:&f}sub f{for(1..
$_[0]*$s){for(0,1){$m[$_]+=$m[$_+2]}if ($p
){while(<DATA>){$t=$_;tr/\n\t //||last;&$r
if eof(DATA);}}$g[$m[0]][$m[1]]=$p?$t:" ";
}}for$i(0..($s*20)){$l = "";for(0..($s*30)
){$l.=$g[$i][$_]||" ";}$l=~ s/\s+$//;print
"$l\n" if length($l);}
__END__
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You can also pass $s in and the ranges aroung the prints should scale properly.