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Marshray started getting dead comments for some reason 4 days ago, but his reply to my top comment is extremely relevant:

> I'm not tpatcek, but yes there's a reason why PBKDF2 doesn't do it that way. Because SHA1(SHA1(SHA1(SHA1(...)))) is broken. Approximately 0.8*log_2(iteration count) bits of entropy are lost with that construction. http://eprint.iacr.org/2010/384

It's not a horrifying game-over break to go from 160 bits of entropy to 154 with 1,000 iterations, but you're not getting the security you thought you were; and there's no amount of personal investigation into the problem that would have helped--this is the kind of thing that takes an ecosystem of very smart people working very hard for a long time.

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