I used these settings to get this photo:

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1) start out with a blank image (background color)
2 - optional) find a suitable real-life digital camo picture (like the one you posted) for the colors, or just use your own colors
3) set the background color, in this case I used a grey.
4) draw some lines and blobs, kinda what the old woodland camo was like (google it).
Repeat step 4 with as many other colors as you wish (more than 3 more is pushing it)
HINT: It looks better if you underline or "trace" the previous color with your new color (look below)
5) once it looks good: (or kinda random like mine)

6) Use
Filter->Distort->Wave filter.
I used these settings and ran the same filter twice (for smaller blocks), but play around with it for slightly different effects:
Number of generators: 3
Wavelength: Min. 1 Max. 266
Amplitude: Min. 13 Max. 61
Scale: Horiz. 50 Vert 50
Hope that helped