Common Lisp, 442/206 chars
(defun d (l)
(if l
(let ((f (car l))
(r (d (cdr l))))
(if r
(if (= (+ f 1) (caar r))
(push `(,f ,(cadar r)) (cdr r))
(push `(,f ,f) r))
`((,f ,f))
))
nil))
(defun p (l)
(mapc #'(lambda (x)
(if (= (car x) (cadr x))
(format t "~a " (car x))
(if (= (+ 1 (car x)) (cadr x))
(format t "~a ~a " (car x) (cadr x))
(format t "~a-~a " (car x) (cadr x)))))
(d l)))
The "d" function rewrites the input list into a canonical form. For fun I did this entirely recursively. The "p" function formats the output to the equivalent of the reference implementation.