Basically means you failed out of Mudd. Ask TracyvanCort all the different ways she could have ITR'd sophomore year; she knows the rules much better (and got much closer to having them applied) than she'd like. DanCicio is also a good person to ask, since he technically ITR'd more times than you care to know.
If you ITR, you generally have the option of taking a semester (or more) off from Mudd to try to improve your grades elsewhere and the reapply to HMC, or of taking one last transfer semester at Mudd before transferring elsewhere. ScrippsCollege and PitzerCollege are two popular post-ITR destinations.