Aha! I’m not insane. It is my suspicion that the server has an old version of the msxml.dll which is not up to w3c snuff. So, just in case you were wondering, the correct options for a XSL stylesheet declaration are:

<xsl:stylesheet version=”1.0″ xmlns:xsl=”http://www.w3.org/1999/XSL/Transform”>

or

<xsl:transform version=”1.0″ xmlns:xsl=”http://www.w3.org/1999/XSL/Transform”>

I guess the moral of this story is this: don’t ever defy the W3C.