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Is a very interesting problem but difficult to experiment with.. anyway you can try to use twig_roots or you can try to preprocess your input.
In fact I see a declared lenght in the header: will be possible to read only what is declared in Content-Length and pass this chunk to XML::Twig to be processed.
Maybe you can elaborate a specific XML::Twig question as new SOPW, the author of the module lurks here sometimes..
UPDATE: you can also read this interesting article
There are no rules, there are no thumbs..
Reinvent the wheel, then learn The Wheel; may be one day you reinvent one of THE WHEELS.
In reply to Re^3: XML Parsing from URL - XML::Twig and infinite stream