expl-spacify.el

(defun expl3-spacify-paragraph (begin end)
  "Convert all spaces to tildes between BEGIN and END.
If the region is not active, the current paragraph is used."
  (interactive (if (region-active-p)
                   (list (region-beginning)
                         (region-end))
                 (save-excursion
                   (mark-paragraph)
                   (forward-word 1)
                   (forward-word -1)
                   (list (point) (mark)))))
  (let ((text (buffer-substring-no-properties begin end))
        (from-region (region-active-p))
        indent)
    (delete-region begin end)
    (insert
     (with-temp-buffer
       (insert text)
       (goto-char 1)

       ;; grab the indentation amount
       (forward-line 1)
       (forward-word 1)
       (forward-word -1)
       (setq indent (current-column))
       (goto-char 1)

       ;; remove all indentation
       (while (not (eobp))
         (delete-horizontal-space)
         (forward-line 1))
       (goto-char 1)

       ;; replace
       (while (search-forward " " nil t)
         (replace-match "~"))
       (goto-char 1)

       ;; put spaces at the end of lines
       (while (search-forward "\n" nil t)
         (replace-match "~\n"))
       (goto-char 1)

       ;; re-insert indentation
       (forward-line 1)
       (while (not (eobp))
         (insert (make-string indent ?\ ))
         (forward-line 1))

       ;; remove the trailing space if appropriate
       (unless from-region
         (when (search-backward "~" nil t)
           (replace-match "")))
       (buffer-string)))))