"How can they know the hash value of a file unless they have access to it's decrypted content?"
they're probably looking for files WITH that hash value, which is probably known because the file downloads were being monitored [or something like that]. They have to prove THAT GUY has THAT FILE and then they have that part of their case evidence nailed up. The judge has apparently determined that the cops have cause for a warrant, and ordered the defendant to provide the information according to the discovery request, and he refused, and the judge probably issued a SPECIFIC order regarding the decryption of the data, and he didn't and now is sitting in jail.
My guess based on what I read in the article. It's probably close to what happened.
Biting the hand that feeds IT
