Thanks David, this technique looks great and seems what I was looking
for. It took me a little while to understand how and why the
select="..." works, however :-)

Am I correct that by using the above, the maximum nesting depth of
template calls is the number of (here:) elements in the source
document? I tried with Saxon HE and got a "Too many nested
apply-templates calls. The stylesheet may be looping." error after
already 636 elements. I have to deal with documents eventually that
have>100k elements.

I'll have to look into ways of avoiding that error, like reducing the
candidate elements and "skipping" the ones for which I know that they
will not change the tunnel variable's value so that I do not recurse
into a template for them.

reasonable documents will have more than around 600 list items in
them, so that alone won't suffice.

Again, thanks for the great idea, and I now just need to work out the
details...

-Christian