# my regexp matches from the bottom to the top but I'd like it to replace from the top down
local $/=undef;
my $DataToParse = <DATA>;
my $item = "SeaMonkeys";
my $catNum = "SMKY-1978";
my $maxInstancesToReplace = 2;
parseData();
exit();

sub parseData {
	for (my $counter = 0; $counter < $maxInstancesToReplace; $counter++) {
		# Stick in a temporary text placeholder that I will replace later after more processing
		$DataToParse =~ s/(.+)\sELEMENT\s(.+?)\s\(Item := \"$item\".+?CatalogNumber := \"$catNum.+?END_ELEMENT(.+)/$1 ***** Found $2\'s $catNum $item. (counter: $counter) *****$3/s;
	} 
	print("Here's the result:\n$DataToParse\n");
}

__DATA__
	ELEMENT Kurt (Item := "BrightLite",
	              ItemID := 29,
	              CatalogNumber := "BTLT-9274",
	              Vendor := 100,
	END_ELEMENT

	ELEMENT Mick (Item := "PetRock",
	              ItemID := 36,
	              CatalogNumber := "PTRK-3475/A",
	              Vendor := 82,
	END_ELEMENT

	ELEMENT Kurt (Item := "SeaMonkeys",
	              ItemID := 12,
	              CatalogNumber := "SMKY-1978/E",
	              Vendor := 77,
	END_ELEMENT

	ELEMENT Joe (Item := "Pong",
	             ItemID := 24,
	             CatalogNumber := "PONG-1482",
	             Vendor := 5,
	END_ELEMENT

	ELEMENT Shane (Item := "SeaMonkeys",
	               ItemID := 1032,
	               CatalogNumber := "SMKY-1978/E",
	               Vendor := 77,
	END_ELEMENT

	ELEMENT Kurt (Item := "Battleship",
	              ItemID := 99,
	              CatalogNumber := "BTLS-5234",
	              Vendor := 529,
	END_ELEMENT

	ELEMENT Mick (Item := "SeaMonkeys",
	              ItemID := 8,
	              CatalogNumber := "SMKY-1978/F",
	              Vendor := 77,
	END_ELEMENT

	ELEMENT Frank (Item := "PetRock",
	               ItemID := 42,
	               CatalogNumber := "PTRK-3475/B",
	               Vendor := 82,
	END_ELEMENT

	ELEMENT Joe (Item := "SeaMonkeys",
	             ItemID := 8,
	             CatalogNumber := "SMKY-1979/A",
	             Vendor := 77,
	END_ELEMENT

##</code><code>##

Here's the result:
        ELEMENT Kurt (Item := "BrightLite",
                      ItemID := 29,
                      CatalogNumber := "BTLT-9274",
                      Vendor := 100,
        END_ELEMENT

        ELEMENT Mick (Item := "PetRock",
                      ItemID := 36,
                      CatalogNumber := "PTRK-3475/A",
                      Vendor := 82,
        END_ELEMENT

        ELEMENT Kurt (Item := "SeaMonkeys",
                      ItemID := 12,
                      CatalogNumber := "SMKY-1978/E",
                      Vendor := 77,
        END_ELEMENT

        ELEMENT Joe (Item := "Pong",
                     ItemID := 24,
                     CatalogNumber := "PONG-1482",
                     Vendor := 5,
        END_ELEMENT

 ***** Found Shane's SMKY-1978 SeaMonkeys. (counter: 1) *****

        ELEMENT Kurt (Item := "Battleship",
                      ItemID := 99,
                      CatalogNumber := "BTLS-5234",
                      Vendor := 529,
        END_ELEMENT

 ***** Found Mick's SMKY-1978 SeaMonkeys. (counter: 0) *****

        ELEMENT Frank (Item := "PetRock",
                       ItemID := 42,
                       CatalogNumber := "PTRK-3475/B",
                       Vendor := 82,
        END_ELEMENT

        ELEMENT Joe (Item := "SeaMonkeys",
                     ItemID := 8,
                     CatalogNumber := "SMKY-1979/A",
                     Vendor := 77,
        END_ELEMENT