From a Dihydrofuran to an Indole-3-acetate

Treatment of ethyl JV-2-iodophenylcarbamate with 2,5-dihydro-2,5-dimethoxyfuran in DMF in the presence of Hiinig s base, TEBA and a catalytic amount of palladium(II) acetate at 80°C for 10 hours gave the expected 3-aryl-2,5-dimethoxy-2,3-dihydrofuran 1 as a mixture of dia-stereomers. Crude 1 was stirred at room temperature in DCM containing 6% v/v TFA to give methyl l-ethoxycarbonylindole-3-acetate 2 in 65% overall yield. 

Elucidate the reaction sequence and suggest a mechanism for the conversion of 1 into 2. 

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