Man, tell me this lens mechanism is not from your own camera 
Yes it
was my own camera!
No, just kidding. I needed a replacement display and was not willing to pay genuine Canon parts prices.
Found a camera with broken lens but display in good order for half the price at ebay.
Could not resist to disassemble the whole thing. Everything is really tiny, it's just amazing

how does the ND filter "kick in"? is it done mechanically?
There are two tiny solenoid actuators, similar to the head moving mechanism of hard disks, to move the shutter and the ND filter.
The ND filter is indeed the replacement for a diaphragm mechanism. I believe due to the serious space restrictions.
I discovered 3 cases where the camera kicks the ND filter in:
- In very bright sunlight: gives well saturated blue sky.
- In Fireworks mode: motion blur intended.
- When flash and macro mode simultaniously active: to throttle down further.
Cheers