Had time to review old papers....
If this follows from the imidization reactions:
Make enolate, this attacks anhydride. Result is first product shown by pgk in attached file.
The acetic anhydride reacts with the carboxylate by anhydride exchange: the new carboxylate formed in the first product is now a mixed anhydride with an acetate group, and the other piece of acetic anhydride exits as the acetate ion.
An enolate is formed again between the three carbonyls - this displaces the acetate of the mixed anhydride to re-form the 5 membered ring.
So now the product is a 1,3-cyclopentanedione with a 2-acetyl group and a 2-carboxyethyl group.
This does the retro-Claisen as suggested by clarkstill.
The second reaction is acid hydrolysis to the acid, which (like acetoacetic acid) readily decarboxylates.