Ok, that's also the same as mine.

Under normal windows semantics

"C:/path/to/file.xml"
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should be acceptable, provided you've actually got permissions to read that file (which probably includes read access to the directories above it)

You can try passing an XML::DOM object instead of a file (XML::XSLT supports both):

# stuff here..
my $parser = new XML::DOM::Parser;
my $doc = $parser->parsefile ("c:/path/to/file.xml");
$xslt->transform($doc);
# proceed
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