Definition:

Lexer : 

MOVETO  "-->"
NONE   "NONE"
IDENTIFIER [a-zA-Z_][a-zA-Z0-9_]*
RANGE \[[^\n\]]*\]
STATE   "%state" 
START   "%start"
ACTION  "%action"

New states 
----------
COMMENT  -- single "//" or multiline "/* */" comment
MACRO   -- %macro and that line
INLINE  -- between %{ & %}

Grammar
-------

CompilationUnit
	: SectionsList

SectionsList
	: Section
	| SectionsList Section

Section
	: Inline
	| Macro
	| State
	| Action
	| Start

Inline
	: INLINE 

Macro 
	: MACRO

State
	: STATE IDENTIFIER ':' TransitionList ';'

TransitionList
	: Transition
	| Transition '|' TransitionList

Transition
	: CHAR_LITERAL MOVETO IDENTIFIER
	| OTHER MOVETO IDENTIFIER
	| RANGE MOVETO IDENTIFIER

Action 
	: ACTION IdentifierList INLINE

IdentifierList
	: Identifier
	| IdentifierList Identifier

Start
	: START IDENTIFIER

Semantic checks
---------------
No multiple states or actions
Only a single transition for a particular input from a state
No scoping of state names (thank god !)
Always peek ?
Debug & Trace generation
Epsilon transitions allowed only when that is the only transition there

Future Improvements Planned
---------------------------
Removal of unconnected states
Merge multiple motion to the same target into a single comparison
Epsilon transitions from a node 
Documentation via graphviz or other diagramming tool
Multi-line macros
Inline node actions which are accessed only from one location
Jump distance re-arrangement, for minimum traversal
DFA state reduction algorithms 
"%include" support
code generation for C

Example fragment
----------------

%{
	// rest of code
	public override bool Read()
	{
		.... locals
%}

%macro read $1 = ReadChar()
%macro peek $1 = PeekChar()

%start START

%state START
	: '<'  --> opening_tag
	| [a-zA-Z_] --> text
	| '&' --> entity
	| NONE --> empty  
	| . --> error
	;

%state END ; 

Seemed to be a good idea with 

%action START %{
	// action for start ...
%}

etc...

Intended code output
--------------------

START:
	c = ReadChar();
	do
	{
		// action;
	}while(false);
	c = PeekChar();
	if(c == '<')
	{
#ifdef TRACE
		Trace.WriteLine(" got '&' going to closing_tag");
#endif
#ifdef DEBUG_STACK
	.......
#endif 
		goto opening_tag;
	}
	...
END:
	return true;
ERROR:
	return false;