well, the first step is is the formation of the pseudo-enolate, with the pyridine acting as a base on H-CH(COOH)2.
this pseudo-enolate reforms the diacid and attacks the aldehyde as one could expect. since the alcoxide formed is more basic than a carboxilic acid, one could expect a fast proton exchange to occur, yielding the pseudo-aldol you have depicted in your step.
your step shows the rest. in this case, the decarboxilation doesnt occur via the usual mechanism, since we dont have an acid catalyst.
i'd expect the proton exchange and the decarboxilative elimination to be concertated, since that would imply the 6-center transition stante that's accepted for the usual beta-ketoacid decarboxilations, but that's just me...