Does anyone know how to accomplish this effect in hitfilm 2 pro or hitfilm 3 express? I know you can make a 2d version in GIMP, but I need one that is 3d and can be animated.
Are you referring to the stretch? The Droste effect is a recursive picture in picture effect, and the term is now misused a lot.
I've been working on a shot with "video feedback" (which is a droste effect), but, so far, I haven't come up with a better workflow than rigging where I want the. image to repeat, rendering, pasting the render into recursion 1, render, paste render into recursion 2, re-render, repeat.
The only other way I can think of offhand is putting the source image into a comp shot, then stacking the recursion rig into another comp and copying the source comp into position.
Now, if you want the spiral stretch, well, let me tag @NxVisualStudio. Tony, you know how Xander did it?