Wow… That sentence made it seem way harder than it actually is. I'm going to assume you know what a nibble is (2 crumbs, 4 bits). If you have followed the directions so far, you will have a 9 byte piece of code. The first byte of that code will act like a sub-sub-key. For every byte after the first one you will either need to (a.) keep the byte the same or (b.) swap nibbles (meaning 10010001 will become 00011001). The only thing that is variable is whether or not to swap nibbles. You can tell by the first byte. If the first bit of the first byte is 1, then swap nibbles of the second byte. If, on the other hand, the first bit is 0, then do nothing to the second byte. I will give you a small example of how this works:
Say the first 3 bytes of your code is now:
10110110 01101101 10000110 [insert 6 more bytes here, I'm too lazy to type a 9 byte message]
The first byte will be your sub-sub-key. Now let's look at the second byte. Since it is the first byte in the code besides the sub-sub-key, it corresponds to the first bit in the sub-sub-key. It is a one, so you have to swap nibbles. 01101101 becomes 11010110. Now the third byte: it corresponds to the second bit in the first byte. Its a 0, so we leave it alone. After you do that 6 more times, we end up with:
10110110 11010110 10000110 [insert 6 more bytes here]
Now you can continue on with the rest of the cryptology thing. Hope I could be of assistance. (BTW: What made you decide to look up this cipher? It seems overly-complicated) If you have anymore problems or don't get what I posted, just ask. :)
…I'm tired of typing…