The transient extensional rheology and the dynamics of elastocapillary thinning in aqueous solutions of polyethylene oxide (PEO) are studied with high-speed digital video microscopy. At long times, the evolution of the thread radius deviates from self-similar exponential decay and competition between elastic, capillary and inertial forces leads to the formation of a periodic array of beads connected by axially uniform ligaments. This configuration is unstable and successive instabilities propagate from the necks connecting the beads and ligaments. This iterated process results in multiple generations of beads developing along the string in general agreement with predictions of Chang et al. [Phys. Fluids, 11 (1999) 1717] although the experiments yield a different recursion relation between the successive generations of beads. At long times, finite extensibility truncates the iterated instability, and slow axial translation of the bead arrays along the interconnecting threads leads to progressive coalescence before the ultimate rupture of the fluid column. Despite these dynamical complexities it is still possible to measure the steady growth in the transient extensional viscosity by monitoring the slow capillary-driven thinning in the cylindrical ligaments between beads.