[jpd]

Doesn't this only encrypt the first line of input? I thought the idea was to generate a pad-file of equal length to the whole file.

    (with-open-file (input input-path)
      (with-open-file (pad pad-path)
        (setq input-buffer (%string-to-octets (read-line input) *encoding*))
        (setq pad-buffer (%string-to-octets (read-line pad) *encoding*))

Also, I'm not sure what (specifically) read-line looks for to stop reading, but if it can occur randomly you could receive errors if this first random new-line occurs before the length of the file's first line. Or at all when using the same pad for many files as you describe. This may be handled by your %octets-to-string handler though.