Can I generate OTP secrets by using a hash?
Say the adversary is giving you $m_0$ and $m_1$, two arbitrary messages. You draw a random $sk$ and a random $b\gets\{0,1\}$ and output $E_{sk}(m_b)$.

So the adversary takes $ct=E_{sk}(m_b)$ and computes the XOR between the first $n$ bits of $ct$ and the $n$ first bits of $m_0$ (where $n$ is the original key length). Then, he does the same thing for $m_1$, so now he has two options for the secret key, $sk_0$ or $sk_1$. So far everything is good, because they are both equally possible, but now the problems begin: the adversary computes $md5(sk_1)$ and $md5(sk_2)$ and XOR the results with the bits $ct[n+1:n+\texttt{md5-length}]$. With a very high probability, only one of the options will make sense, meaning it would be the bits $m_i[n+1:n+\texttt{md5-length}]$ of some message, so he will know what you encrypted.