I was sitting there minding my own business when in walked an old lady.

严格说来，这里的 when 不是从属连词（不是引导状语从句），而是并列连词（相当于 and suddenly）。When 后面的 in walked an old lady 是倒装句（不倒装的形式为 an old lady walked in）。全句意为：我正坐在那儿忙我自己的事，这时（突然）进来了一位老太太。

They were kissing when in walked her father. 他们正在亲吻时，她父亲突然走了进来。

The children were talking noisily when in came the teacher. 孩子们都在大声说话，这里老师进来了。