What are the organic reactions that are taking place in this reaction?
Here is what I think is going on: 


$Step$ $1$: As the OP correctly identified is a Knoevenagel condensation to give A diethyl 4-cyclohexyl-benzalmalonate.
$Step$ $2$ is an example of little-used ester hydrolysis using cyanide ion to give initially the acyl cyanide which is unstable in aq EtOH and gives the diacid B
$Step$ $3$ is loss of one carboxy group by acid catalysed decarboxylation to give the cinnamic acid C
$Step$ $4$ formation of the mixed anhydride D
$Step$ $5$ cyclisation through formation of an aluminium-acyl complex literature example here to give the final product 6-cyclohexyl-Inden-1-one E