This is going to be really disorganized, and it's mostly just things I put down while reading over a printed copy and slapping notes on everything that stuck out. We'll see if it gets us anywhere/stimulates the discussion, though!
There was the Striking(1), and the Egg was split into twelve worlds, one for each serpent who had a name, and the names of the serpents were alive and coiled into themselves and became more eggs, for names are self-maters, and the Naming went and went. According to the calculations, the random sequence(2) learned very cunningly that fragmentation reserved itself to the left eye(3). Variation realms were the evidence needed.(4)
1. Anu/Sithis interplay, as has been said.
2. Probably Lorkhan, since he stands out as the most distinct et'Ada.
3. Sithis, I think. Not sure. But it seems logical that Anu would be the "Right," Sithis/Padomay the "Left."
4. Seems to be the part where Lorkhan decides that there needs to be some Mundus in his Aurbus.
There was the Biting, which broke the twelve worlds and their name-eggs, and the Biters(5) chewed new names of the lesser serpents until soon death was known to the smallest and your alphabets disappeared but ours did not.(6) The state of rest(7) became worthy of blame, however segmented, so heat was wasted across the right eye. And in mercy we gave to you language that was dead yet walking if you used it(8), which you did, though transient food-forms(9) became problematic.
5. Probably unrelated, but I remember something Nu-Hatta had to say about Biters in relation to Dagoth Ur. I recall it being capitalized as such.
6. This suggests, to me, that the Tsaesci (or their pre-Tsaesance selves) are impossibly ancient, maybe moreso than the Wandering Ehlnofey, though one source I can't recall listed them 'mongst that group.
7. The Aedra?
8. Maybe Ehlnofex, if they're as ancient as I'm thinking, but I could be taking "language" too seriously.
9. This makes me think Wandering Ehlnofey more than anything in the Myth. Other parts almost seem to be speaking of the Aedra, with the references to "dead language," but this part makes me think it's not them. How could the Tsaesci give language, or much of anything else for that matter, to the Aedra?
There was the Slithering, when scales were now name-bites that moved freely(10), and the dead language speakers bled out into non-talk, which is egg-naming inverted, which slides into the shedding of more dead, which cannot be redeemed in the hunger quadrant(11), and now we could no more be detached, for the twelve-to-one only talked unsense except for us, who ate your slithering during trumpet season as the Biters poisoned the random sequence until we came and made of it music(12), as that is the only thing that might save the prey who wore all shapes of confusion not described yet in the calculations. Some of us discovered honor, though more found the idea of moderation, which turned into the identical selection process and we created our eating that way.
10. The untime of the Dawn, if they could recognize it.
11. This passage in particular strikes me as odd. "Egg-naming inverted" seems to me like it suggests something along the lines of non-existance, or rather, sudden non-existance. But if this is the Dawn, then it couldn't refer to the only ones I know of to cease their existence that suddenly. If it isn't the dawn, I'd almost wonder if that refers to the Dwemer somehow. That said, I don't know who the "twelve-to-one" are.
12. Maybe they had a way of averting the effects of untime? Still not sure what Biters are, exactly. The last part of this paragraph is interesting, but I can't make much of it.
There was the Shedding(13), who inflated into a sphere of edible communications and this is how the sequence began to find proportion again. The name-eggs that had survived(14) without also turning into calculation powder settled and became dreugh-waters, which was the first thing to finally encompass the risks attempted by the Striking. Stomach signals wrote a complex document of conditions.(14a) This was the variation map, called dai(15).
13. I want to say this is the solidifying of Mundus, when it shed its gods and was anchored by the Heart.
14. I'm guessing these are the et'Ada who stayed on Nirn and didn't give themselves up entirely to become Earth-Bones. Or, perhaps, given the "dreugh-waters" thing, it's precisely the latter; the Earthbones.
14a. Stomach signals, after looking to the Yokudan creation myth, bring out two comparisons: Either Akel or Sep. Sithis or Lorkhan. Given the rest of this sentence, I'm inclined to think Lorkhan, for the simple fact that the "complex document of conditions," dai, could be Lorkhan's lesson. As we all know, he failed so that the new inhabitants of his world might not.15. I'm still not sure what this is, but I almost want to say it's some way to manipulate Untime into forming the outcome they desire. I'll get to that in a few. I'm probably totally wrong though, anyone got better ideas on this 'dai?'
The Reaching(16) came, where movements of dai(16a) progressed across islands of edible communication and food-forms could stockpile(16b). One Reaching unravelled but the Coiling at its belly made a virtual star line, which made eating lucid(17). We slid to the imago and Named it cunningly.(18/18a) The waters obeyed and dead names took up their place in the random sequence. The first serpents(19) returned to us in transmissions that answered the alphabet-virus which we then consumed at last(20). By the relative dai, we egg-named it and swallowed all source-information to preserve the virus and became immortal thereby. Past the star line, dead-talking continued.
16. I think the Reaching is simply a term for all the attempts to achieve apotheosis, CHIM, or Zero Sum. Again, probably wrong, but my theory on the next point is why I think it may be this.
16a. This could be attempts at reaching new subgradients. Kind of invalidates my term for the reaching, or simply defines it as what I think it is.
16b. Might refer to the building of the Towers, to stockpile Creatia. When we look at the next sentence, the Marukhati's Tower 'unravelled,' so to speak.17. This bit sounds a lot like it's referring to the Marukhati Dragon Break. An unravelling, not necessarily of their attempt, but of Time for a long period. The Coiling could be the Tower they danced upon and broke. (Alternatively, the Reaching may refer to Tower building, given the "islands of edible communication and food-forms could stockpile ((creatia?))." I think I like that theory for the Reaching better, actually.) Either way, whatever the Coiling refers to, the "virtual star line, which made eating lucid" brings to mind the falling star(s?) by which the days were counted in the Middle Dawn.
18. Might be when they initialized their plan to shine their scales and become the IMMORTAL. VAMPIRE. SNAKEMEN. that we know and love.
18a. More importantly, the "imago" could either be referring to insects reaching maturity, or to a being or collective they idealized (for being the first to move to a new gradient, perhaps; or first they new of). It could be both. Scarabs + Disapperance... Did the Dwemer achieve a collective Zero Sum? (A type of Zero yet to be discovered...)19. The "first serpents" could mean the gods, but I think it might mean the first to become More, in this case.
20. If "first serpents" means the first mortals to collectively move on, this would seem to imply that they're somehow relaying back from wherever they are saying something like "it works, but here's how you could do it better." The 'alphabet-virus' could mean the infection of the idea with some corrupting error. To answer it would fix the error, then they could consume the concept of immortality and attain it.
20a. Looking more into the Dwemer, possibility of them achieving Zero Sum, etc., I'd almost say these "transmissions" from the "first" could be the Dwemeri Spore-Dream. The Tsaesci reached out in the Dawn and somehow took said spore-dream, which explained to them what they needed to do. The "relative dai" could be their newly-altered plan for Apotheosis. The question is, which route did they take?The Laying then happened, and we moved into forms that had been granted from the source information of the first serpents(21), which was gold-walking(22), which is pattern. The scales became intertwined in the random sequence with music(23) that ate forever, which we fed with you(23a). Low forms created a seeking egg but we fed it to the music, too. Then the Biter-Shedding grew sideways into the reception field and knew a Coiling and mastery was ours borne from the calculations(24). The final name was Tsaescence and we ate it to become it and there are no more variations(25).
General note: This paragraph I have the least on, I think it mostly refers to the process by which they changed. I'll go ahead and fill in details on my thoughts.
21. They became what they are now, by means of the information attained through the aforementioned transmissions.
22. I'm probably not thinking deep enough here, but I'm going to toss myself out on the limb just for [censored] and giggles. Normally I'd think this had to do with "walk like them until they must walk like you," but Talos seemed to be a pioneer in that field and he wasn't around yet. So I'll simply say, what else comes to mind when you think "Gold" and "walk?"
23. I doubt it's just coincidence, all these references to the "random sequence" (presumably Lorkhan) and "music" (Generally associated with his Heart. Tonal Architecture, anyone?)
23a. Another thing here, the scales became intertwined in the random sequence with music... They used the tonal resonance, perhaps, even so far from the Heart? If the random sequence is Lorkhan, it couldn't be much coincidence of his mention so close to music. The question is, what are the scales? Going to A. Putty's idea, part of me wants to say the scales are the Men of Akavir. Or former men, now made into golden godscales, an eradicated race (though not totally, not that the dwemer were totally undone!) to make golden godskin, learned from the pioneers of that concept. But if the scales intertwined in the random sequence with music... Well I'll get there in the summary.24. The Middle Dawn came to an end and their plan worked, whatever it was. The Jills didn't undo it, and I'm betting all the Men of Akavir might've turned up missing when Time settled down again (aside from those that Tosh Raka saved, which is a [censored] story, but we need to explain Pale Pass somehow and it doesn't really fit with the Tsaesci eating the Men, if said Men were still uneaten by that point).
25. They solidified their place, alternate timelines during the Middle Dawn did not corrupt their outcome. They are Tsaesci, Immortal, and uncompromised.
Now some general things. Were the Tsaesci originally men, then serpent-folk? That at least meshes with the "Tsaesci as Wandering Ehlnofey" thing, but doesn't make them old enough to mesh with the early parts of their myth. There's always the "Tsaesci as Wandering Hist" theory from the FSG, which I don't think is necessarily that far off.
The most perplexing thing here is, I'm wondering if they had contact with the Dwemer? What with the talk of gold-walking, and all. And they had to learn that golden-skin business from somewhere. If they did, and that's what the parts I thought might be referring to the Dwemer were talking about, that'd suggest that the Dwemer contacted the Tsaesci -after- Red Mountain, during the Middle Dawn. I know that's so far out in left field that I'm sitting in the parking lot, but I had nothing but a printed copy of the Tsaesci Creation Myth, a pen, and an hour lunch break in the middle of the night. Anyway, have fun pointing out how wrong it is, 'cause I'll bet I'm way the hell off. And I'll bet KM is a lot closer, reading back over that post regarding the convention/dead waters obeying/etc.
EDIT: I gave this another look, with a few other documents on hand to refer to (Namely, the Yokudan creation myth). Got some other ideas, some other things poked out and made me think crazy, lots of fun. A few new points in the paragraphs from this edit, will bold them. Mostly, I got more broad ideas from the greater text, rather than from snippets. Several potentially-conflicting ones that could make the Tsaesci the most [censored] up race on the Mundus. Anyway, some key points!
1) First of all, I think that coiling = apotheosis. Namely due to "the Coiling at its belly" = the apotheosis of the Marukhati made the stars by which to count the days. And "the Biter-Shedding grew sideways (I take this to mean, time un[censored] itself)...and knew a Coiling and mastery was ours..." This isn't to say the Tsaesci are -gods- necessarily, but they're certainly immortal and certainly powerful. And they didn't start that way.
2) Probably should've got to this before 1), but as you probably figured out, I'm disorganized. I think "serpents" refers to gods/immortals/transcended folk in general, whether they're actually serpentine or not. Ie. "We're serpents and perfect, so the closest they could get to being as good as us is to be called a serpent too."
3) Whatever the case, the Tsaesci were obviously NOT looking to do what the Dwemer did, regardless of all the connections I drew (probably just wanting too badly for the two most calculating races to be related somehow... But why wouldn't they be?). We know this because, obviously, they're still here. I think they just used the spore-dream to gain a greater understanding of the methods of divinity, and went for something pretty damn creative. A combination of methods, perhaps.
4) All of the references to music and intertwining in the random sequence and all that jazz (no pun intended) has me thinking they might've done something crazy. They ate the Men to shine their scales, but they didn't wanna disappear a la Dwemer... So they bound themselves to Mundus. They intertwined themselves with the Music. Perhaps, they went so far as to become the Dragon to counter Nirn. The Akatosh to Lorkhan's dead body. An Enantiomorph, on a global scale. That's -way- out there, obviously... But hell, what's to stop them? They're [censored] IMMORTAL. VAMPIRE. SNAKEMEN.
(And in reference to the mention of ALMSIVI as the alphabet-virus... Could be. After all, the Tsaesci, by my interpretation here, did seek to become walking, living gods.)
((And one more little thing: Not sure how this ties in yet, but interesting is the mention of the Marukhati Dragon Break, from Corax of Cyrodiil: 'According to Hestra, Cyrodiil became an Empire across the stars.
According to Shor-El, Cyrodiil became an egg. Most say something in a language they can only speak sideways. The Council has collected texts and accounts from all of its provinces, and they only offer stories that never coincide, save on one point: all the folk of Tamriel during the Middle Dawn, in whatever 'when' they were caught in, tracked the fall of the eight stars. And that is how they counted their days.'))