/**
 * author_cap_filter()
 *
 * Filter on the current_user_can() function.
 * This function is used to explicitly allow authors to edit contributors and other
 * authors posts if they are published or pending.
 *
 * @param array $allcaps All the capabilities of the user
 * @param array $cap     [0] Required capability
 * @param array $args    [0] Requested capability
 *                       [1] User ID
 *                       [2] Associated object ID
 */
function author_cap_filter( $allcaps, $cap, $args ) {

	# Bail out if we're not asking about a post:
	if ( 'edit_post' != $args[0] )
		return $allcaps;

	# Bail out for users who can already edit others posts:
	if ( $allcaps['edit_others_posts'] )
		return $allcaps;

	# Bail out for users who can't publish posts:
	if ( !isset( $allcaps['publish_posts'] ) or !$allcaps['publish_posts'] )
		return $allcaps;

	# Load the post data:
	$post = get_post( $args[2] );

	# Bail out if the user is the post author:
	if ( $args[1] == $post->post_author )
		return $allcaps;

	# Bail out if the post isn't pending or published:
	if ( ( 'pending' != $post->post_status ) and ( 'publish' != $post->post_status ) )
		return $allcaps;

	# Load the author data:
	$author = new WP_User( $post->post_author );

	# Bail out if post author can edit others posts:
	if ( $author->has_cap( 'edit_others_posts' ) )
		return $allcaps;

	$allcaps[$cap[0]] = true;

	return $allcaps;

}
add_filter( 'user_has_cap', 'author_cap_filter', 10, 3 );