I don't get the ctrl-z with your file open procedure....here's what I'm using

$xml_out = new IO::File(">$filename");
    # 'OUTPUT'    writes to this file
    # 'DATA_MODE'    writes <CRLF> after each line
    # 'DATA_INDENT'    indents each level four spaces
    $xml_writer = new XML::Writer(
        OUTPUT      => $xml_out,
        DATA_MODE   => 'true',
        DATA_INDENT => 4
    );
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I'll give your open routine a shot....thanks