Greets,

Here's another entry for you, Limbic~Region. I believe it meets your criteria of checking the longest strings first.

#!/usr/bin/perl
use strict;
use warnings;
use Inline 'C';

for my $file (@ARGV) {
    open(my $fh, '<', $file) or die "Unable to open '$file' for readin
+g: $!";
    while (<$fh>) {
        my ($set) = $_ =~ /^(\w+)/;
        #print "INPUT: $set\n";
        powerset($set, length($set));
    }
}
__END__
__C__

/* Generate a powerset for the set of all unique lowercase letters det
+ected in
 * a string of length [len].
 */
void
powerset(char *set, unsigned len);

/* Set up.
 */
void
init(void);

/* Start with a number.  Print it's associated powerset if we haven't 
+seen it
 * before.  Iterate over the bits, negating one each time and recurse.
 */
void
reduce(long fingerprint);

/* Print the letter associated with each bit in a 32-bit bitmask */
void
decode_and_print(long fingerprint);

/* 0x4000000 is 2**26. This array has one slot for every possible unor
+dered 
 * set of unique lower-case letters.
 * 
 * Note: if memory consumption were a concern, this would be implement
+ed using
 * a bit vector rather than an array of char.
 */
static char seen[0x4000000];

/* Map of individual letters to a bit mask with a single bit set. */
static long letter_masks[128];

void
powerset(char *set, unsigned len) {
    long fingerprint = 0;
    unsigned i;

    /* call init the first time this function is invoked */
    static bool init_flag = FALSE;
    if (!init_flag) {
        init();
        init_flag = TRUE;
    }

    /* generate a bitmask representing this set */
    for (i = 0; i < len; i++)  {
        long bit = letter_masks[ set[i] ];
        if (bit == 0)
            continue;
        fingerprint |= bit;
    }

    /* reduce the bitmask bit by bit */
    reduce(fingerprint);
}

void
init(void) {
    char letter;
    unsigned bitshift;

    /* zero out the "seen" array and the "letter_masks" array */
    memset(seen, 0, sizeof(seen));
    memset(letter_masks, 0, sizeof(letter_masks));

    /* skip the null set, 'cause Limbic~Region sez so */
    seen[0] = 1;

    /* assign one bit mask for each letter (assumes contiguity of a-z)
+ */
    for (letter = 'a', bitshift = 0;
         letter <= 'z';
         letter++, bitshift++
    ) {
        letter_masks[letter] = 0x1 << bitshift;
    }

    return;
}

void
reduce(long fingerprint) {
    unsigned bit;

    /* if we've seen this set, we've seen all its subsets, so bail */
    if (seen[fingerprint])
        return;

    /* first time we've seen this set, so print it */
    seen[fingerprint] = 1;
    decode_and_print(fingerprint);

    /* iterate over the bits in the fingerprint */
    for (bit = 1; bit <= 26; bit++) {
        long single_bit_mask = 0x1 << (bit - 1);
        if (fingerprint & single_bit_mask) {
            /* turn off one bit and recurse */
            reduce( fingerprint ^ single_bit_mask );
        }
    }
}

void
decode_and_print(long fingerprint) {
    unsigned bit;
    char letter;

    /* shift one bit left, increment one letter */
    for (bit = 1, letter = 'a';
         bit <= 26;
         bit++, letter++
    ) {
        /* print the letter if its associated bit is on */
        long single_bit_mask = 0x1 << (bit - 1);
        if (fingerprint & single_bit_mask) {
            putc(letter, stdout);
        }
    }

    /* finish up with a newline */
    putc('\n', stdout);
}
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