If you want a pure XSLT solution, this seems to work..

bad.xsl

<xsl:stylesheet  version="2.0" 
		 xmlns:xsl="http://www.w3.org/1999/XSL/Transform"
		 xmlns:d="data:,dpc"
		 exclude-result-prefixes="d">
 

<xsl:import href="http://www.dcarlisle.demon.co.uk/htmlparse.xsl"/>
<xsl:template match="/">
<xsl:sequence select="d:htmlparse(.)"/>
</xsl:template>

</xsl:stylesheet>


bad.xml


<bad><![CDATA[


 <p>
 <sub>123</sub>4567<eight<img src="file.gif" alt="<b>hello</b>">
 </p>


]]></bad>


$ saxon9 bad.xml bad.xsl
<?xml version="1.0" encoding="UTF-8"?>


 <p xmlns="http://www.w3.org/1999/xhtml">
 <sub>123</sub>4567&lt;eight<img src="file.gif" alt="&lt;b&gt;hello&lt;/b&gt;"/>
 </p>




David

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