Here are some past nodes on solving this problem of expecting ISO-8859-1 but getting UTF-8 back from XML parsers.

XML Parser encoding problem (was: XML::Parser)
XML encoding problems...
XML encoding ISO-8859-1

Regexp to convert high-bit (?) characters to character entites

Update: I posted those links because I recognize that your problem is converting from UTF8, but I don't know much about Template Toolkit. I thought they might help you solve the problem (rather than understand it). Hopefully one of the TT gurus will chime in.

In reply to Re: Template Toolkit and non-english characters by epoptai
in thread Template Toolkit and non-english characters by tosh

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