Formation of (Gamma) Methylparaconic acid
The mechanism looks OK. Though catalytic NaOEt would be a better base than NaOH as the EtO- is regenerated as the reaction proceeds.

The opening of the lactone under basic conditions is reversible but the reformation of the lactone is favoured. A mild basic hydrolysis - 1eq LiOH in 19:1 THF/H2O - should give you your target.

Self condensation is always a possibility with acetaldehyde - this is why few reactions go with 100% yield in real life