$ printf "Line1\nLine2\nLine3\n\nXYZ: Blah\n" | perl -p -e "$/=undef; s|\nXYZ.+\n||"
Line1
Line2
Line3

##</code><code>##

$ printf "Line1\nLine2\nLine3\n\nXYZ: Blah\n" | perl -n -e '$buf.=$_; if ($buf=~s|\nXYZ.+\n||) {print $buf; $buf=""}'
Line1
Line2
Line3