You do not want to read the contents of the XML file, just to apply the XSLT to it. Simply pass the name of the file to the transform method: (snippet taken from the man page of XML::XSLT):

use XML::XSLT;

my $xslt = XML::XSLT->new ($xsl, warnings => 1);

$xslt->transform ($xmlfile);
print $xslt->toString;
[download]

This has the beneficial side-effect, that you will (hoepfully) get more descriptive error messages...