Code:

void enableIRIn() {

  // setup pulse clock timer interrupt
  //Prescale /8 (16M/8 = 0.5 microseconds per tick)
  // Therefore, the timer interval can range from 0.5 to 128 microseconds
  // depending on the reset value (255 to 0)
  TCCR1A = 0;
  TCCR1B = _BV(WGM12) | _BV(CS10);
  OCR1A = F_CPU * USECPERTICK / 1000000;
  TCNT1 = 0;

  //Timer1 Overflow Interrupt Enable
  TIMSK1 = _BV(OCIE1A);

  // initialize state machine variables
  irparams.rcvstate = STATE_IDLE;
  irparams.rawlen = 0;

  // set pin modes
  IRREAD_DDR &= ~(1 << IRREAD_POS);
}

Code:

ISR(TIM1_COMPA_vect)
{

  irparams.timer++; // One more 50us tick
  if (irparams.rawlen >= RAWBUF) {
    // Buffer overflow
    irparams.rcvstate = STATE_STOP;
  }
  switch(irparams.rcvstate) {
  case STATE_IDLE: // In the middle of a gap
    if (bit_is_clear(IRREAD_PIN, IRREAD_POS)) {
      if (irparams.timer < GAP_TICKS) {
        // Not big enough to be a gap.
        irparams.timer = 0;
      }
      else {
        // gap just ended, record duration and start recording transmission
        irparams.rawlen = 0;
        irparams.rawbuf[irparams.rawlen++] = irparams.timer;
        irparams.timer = 0;
        irparams.rcvstate = STATE_MARK;
      }
    }
    break;
  case STATE_MARK: // timing MARK
    if (bit_is_set(IRREAD_PIN, IRREAD_POS)) {   // MARK ended, record time
      irparams.rawbuf[irparams.rawlen++] = irparams.timer;
      irparams.timer = 0;
      irparams.rcvstate = STATE_SPACE;
    }
    break;
  case STATE_SPACE: // timing SPACE
    if (bit_is_clear(IRREAD_PIN, IRREAD_POS)) { // SPACE just ended, record it
      irparams.rawbuf[irparams.rawlen++] = irparams.timer;
      irparams.timer = 0;
      irparams.rcvstate = STATE_MARK;
    }
    else { // SPACE
      if (irparams.timer > GAP_TICKS) {
        // big SPACE, indicates gap between codes
        // Mark current code as ready for processing
        // Switch to STOP
        // Don't reset timer; keep counting space width
        irparams.rcvstate = STATE_STOP;
      }
    }
    break;
  case STATE_STOP: // waiting, measuring gap
    if (bit_is_clear(IRREAD_PIN, IRREAD_POS)) { // reset gap timer
      irparams.timer = 0;
    }
    break;
  }
}