Welcome to the wonderful world of XML!

I can't figure out exactly what is your original format but I will nevertheless go for the shameless plug:.

<shameless_plug>XML::Twig will happily deal with this problem. get the latest version (3.00) from here and you won't have to bother with entities being dropped.</shameless_plug>

Try playing with this code (with and without the keep_encoding option for example):

#!/bin/perl -w
use strict;
use XML::Twig;

my $t= new XML::Twig( keep_encoding => 1);

{ $/= '';
  while( <DATA>)
    { $t->parse( $_);
      $t->print;
      print "\n";
    }
}

__DATA__
<?xml version="1.0" encoding="ISO-8859-1"?>
<!DOCTYPE doc SYSTEM "dummy"[]>
<doc att="valué ">A document with text in latin1: soupçonné d'être</do
+c>

<?xml version="1.0"?>
<!DOCTYPE doc SYSTEM "dummy"[]>
<doc att="valu&eacute;">A document with text in latin1:soup&ccedil;onn
+&eacute; d'etre</doc>
[download]