Parsing error on AIX Unicode 0x{2}

I have an xsl stylesheet which is being transformed with an xml document to produce an Adobe FO stylesheet to dynamically create a PDF. I'm having some differences with reading in my xsl stylesheet between my Windows based test environment, which is working fine, and AIX test server. The exception message I continually receive on AIX server is: 

Error in AdobeService.createFO - TransformerException: javax.xml.transform.TransformerConfigurationException: javax.xml.transform.TransformerException: org.xml.sax.SAXParseException: An invalid XML character (Unicode: 0x{2}) was found in the value of attribute "{1}".

The odd thing is that I don't have any unicode or special characters in my xsl stylesheet. Any ideas as to how to investigate this would be greatly appreciated. 
Does using utf-8 encoding solve this? I've currently <?xml version="1.0" encoding="iso-8859-1"?> in the stylesheet.
Thanks,
Ashish

 XSL-List info and archive:  http://www.mulberrytech.com/xsl/xsl-list