Kelim, Chapter Ten, Mishnah Eight
1) If [earthenware] pans were placed one within the other and their rims were on the same level, and there was a sheretz in the upper one or in the lower one, that pan alone becomes unclean but all the others remain clean.
2) If [they were perforated] to the extent of admitting a liquid, and the sheretz was in the uppermost one, all become unclean.
a) If in the lowest one, that one is unclean while the others remain clean.
3) If the sheretz was in the uppermost one and the lowest projected above it, both are unclean.
4) If the sheretz was in the uppermost one and the lowest projected above it, any one that contained dripping liquid becomes unclean.
Section one: If the sheretz is in the upper pan, the lower pans are still clean because the sheretz is not considered to be in the air-space of the lower pans. Only the upper pan is impure because the sheretz is in its air-space.
If the sheretz is in the lower pan it is unclean but the upper pans are clean because the sheretz is not in their air-space.
Section two: If the pans were perforated enough that they could let liquid in and out, they are still susceptible to impurity. In order for them not to be susceptible they must be able to admit and let out an olive (see 3:2). Nevertheless, they are not considered to be “vessels” vis a vis other vessels in order to afford protection from impurity. Therefore, if the sheretz is in the upper one, it doesn’t protect the lower ones. The sheretz is considered to be in their air-space as well.
However, if it is in the lower one, the upper (inner) pans are pure because the sheretz is still not in their air-space.
Section three: The mishnah now returns to the first scenario, where the pans are not perforated. If the lowest pan projects above the upper one, and the sheretz is in the upper one, then both of those pans are unclean, because the sheretz is in both of their air-spaces. However, the middle pans remain clean because the sheretz is not in their air-space.
Section four: This section seems to be some sort of later addition to the mishnah which relates to that which was immediately stated before. When it was stated in section three that the middle pans are pure, that was true only if they were dry. If they were moist with dripping liquid, then the liquid is unclean and it in turn defiles the pan.