1) Why was there not a more descriptive error; I didn't even see anything indicative of an error during import when I turned the debug switch on.

I am absolutely with you on this issue. I know that you are restricted to use XML::XSLT, but maybe it would be more beneficial to somehow migrate to XML::LibXML & co., because, for me at least, it have proven itself much more usable over the years. Also, it allows you to process multiple source files with the same stylesheet without reparsing (if this is what you aimed in point 2)), but I myself have never had to do such thing in reality...