Standard Pascal, 197 174 bytes

-24 by only executing 5th character to end instead of removing first 4 characters of string.

procedure E(i:string);var j,p:string;u,c:word;begin j:=i[1];p:=i[3];for u:=5to length(i)do if i[u]=j then inc(c)else if i[u]=p then begin write(char(c mod 127));c:=0;end;end;

Assumes Linux newlines (LF/#10) in input, and only can work if code is less than 65535 bytes long. Executes with 16-bit counter. Assuming all variables initialized to empty string and 0.