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PWL files

I've been trying to figure out the method of encryption for OSR2 Win95 and
Win98 *.pwl files and I was hoping someone had some details about the
method used. I've been told that resources are encrypted using RC4 with
a MD5 hash of the password as the key, although I haven't had any luck
using this information to decrypt resources with a known password. 
Does anyone have it figured out?