I guess you could take a big step using wp_list_categories()
with a walker
to add a additional Unordered List to every item.
The code:
$cat_id = get_query_var( 'cat' );
$subcats = get_categories( 'child_of=" . $cat_id ); // child categories
class Cat_Walker extends Walker_Category {
function end_el( &$output, $page, $depth = 0, $args = array() ) {
$posts = get_posts( "cat=" . $page->term_id );
if ( sizeof( $posts ) > 0 ) {
$output .= "<ul>';
foreach ( $posts as $post ) {
$output .= sprintf( '<li><a href="https://wordpress.stackexchange.com/questions/89959/%1$s">%2$s</a></li>', get_permalink( $post->ID ), $post->post_title );
}
$output .= '</ul>';
}
$output .= '</li>';
}
}
foreach ( $subcats as $subcat ) {
$subsubcats = get_categories( 'child_of=" . $subcat->term_id ); // sub child categories
foreach ( $subsubcats as $subsubcat ) {
$args = array(
"title_li' => '',
'show_option_none' => '',
'taxonomy' => 'category',
'child_of' => $subsubcat->term_id,
'walker' => new Cat_Walker( )
);
wp_list_categories( $args );
}
}