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Eliezer_Yudkowsky comments on Ingredients of Timeless Decision Theory - Less Wrong
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This is the point at which I say "Wrong" and "Read the literature". I'm not sure how I can explain this any more clearly than I have already, barring a full-fledged sequence. At 7pm the CDT agent calculates that if it modifies its source to use the old algorithm in cases where Omega saw the code before 7pm, it will get an extra thousand dollars on Newcomb's Problem, since it will take box A which contains an additional thousand dollars, and since its decision to modify its code at 7pm has no effect on an Omega who saw the code before 7pm, hence no effect on whether box B is full. It does not reason "but Omega knows I will change my code". If it reasoned that way it would be TDT, not CDT, and would one-box to begin with.
Actually I will add another comment because I can now articulate where the ambiguity comes in: how you add self modification to CDT (which doesn't have it in the usual form); I've been assuming the original algorithm doesn't try to micromanage the new algorithm's decisions (which strikes me as the sensible way, not least because it gives better results here); you've been assuming it does (which I suppose you could argue, is more true to the spirit of the original CDT).
I still disagree, but I agree that we have hit the limits of discussion in this comment thread; fundamentally this needs to be analyzed in a more precise language than English. We can revisit it if either of us ever gets to actually programming anything like this.