I believe there is a bug in licq 1.2.7 that causes messages received from server in a particular fashion to be recoded from server to local encoding twice.
Please see attached patch for additional details. I am not sure if this patch won't break "translation" for some other types of events, but it seems that original practice was to recode in ProcessMessage() not before it.
I think this same problem is reportes as bug 761022 in the bug tracker, and bugs 765938 and 660370 seem to be duplicates.
-- Andriy Gapon
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