The dilation equation arises naturally when using a multiresolution analysis to construct a wavelet basis. We consider solutions in the space of signed measures, which, after normalization, can be viewed as pseudo-probability measures. Using probabilistic ideas as well as a notion of binary expansions, we discuss the existence and absolute continuity of solutions in dimensions one and two, efficiently recovering previous results in two natural cases. A central role is played by the development of two variants of the classical cascade algorithm, which are adapted to the pseudo-probabilistic and elementary number theoretic context.