How to convert flat data to hierarchical data

Is there a simple stylesheet that will transform the flat data shown
below into the hierarchical form that is at the end of this email?  I
hate to ask for your help but I'm stumped at the moment.  EmployeeGroup
elements, while presented in a flat form in the initial XML output need
to be nested based on their EmployeeGroupTree child element's SK
attribute and their Parent child element's SK attribute (or xsi:nil
attribute).  Each level in the hierarchy can have zero or more child
EmployeeGroup elements.  The root of each tree is the EmployeeGroup with
a <Parent xsi:nil="true"/> child.

<!-- Original XML with flat structure -->

<EmployeeGroups xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance">

<EmployeeGroup SK="1">
<EmployeeGroupTree SK="1"/>
<Code>AB_GP1</Code>
<Parent xsi:nil="true"/>
</EmployeeGroup>

<EmployeeGroup SK="2">
<EmployeeGroupTree SK="2"/>
<Code>AB_GP2</Code>
<Parent xsi:nil="true"/>
</EmployeeGroup>

<EmployeeGroup SK="3">
<EmployeeGroupTree SK="1"/>
<Code>AB1_G1</Code>
<Parent SK="1"/>
</EmployeeGroup>

<EmployeeGroup SK="4">
<EmployeeGroupTree SK="2"/>
<Code>AB2_G1</Code>
<Parent SK="2"/>
</EmployeeGroup>

<EmployeeGroup SK="5">
<EmployeeGroupTree SK="3"/>
<Code>CATGRY</Code>
<Parent xsi:nil="true"/>
</EmployeeGroup>

<EmployeeGroup SK="6">
<EmployeeGroupTree SK="4"/>
<Code>CSV   </Code>
<Parent xsi:nil="true"/>
</EmployeeGroup>

<EmployeeGroup SK="7">
<EmployeeGroupTree SK="5"/>
<Code>HEAP  </Code>
<Parent xsi:nil="true"/>
</EmployeeGroup>

<EmployeeGroup SK="8">
<EmployeeGroupTree SK="5"/>
<Code>H1    </Code>
<Parent SK="7"/>
</EmployeeGroup>

<EmployeeGroup SK="9">
<EmployeeGroupTree SK="5"/>
<Code>H10   </Code>
<Parent SK="7"/>
</EmployeeGroup>

<EmployeeGroup SK="10">
<EmployeeGroupTree SK="5"/>
<Code>H11   </Code>
<Parent SK="7"/>
</EmployeeGroup>

<EmployeeGroup SK="11">
<EmployeeGroupTree SK="5"/>
<Code>H12   </Code>
<Parent SK="7"/>
</EmployeeGroup>

<EmployeeGroup SK="12">
<EmployeeGroupTree SK="5"/>
<Code>H13   </Code>
<Parent SK="7"/>
</EmployeeGroup>

<EmployeeGroup SK="13">
<EmployeeGroupTree SK="1"/>
<Code>TEST  </Code>
<Parent SK="3"/>
</EmployeeGroup>

<EmployeeGroup SK="14">
<EmployeeGroupTree SK="1"/>
<Code>TEST2 </Code>
<Parent SK="13"/>
</EmployeeGroup>

</EmployeeGroups>

<!-- desired hierarchical output of XSL transformation -->

<EmployeeGroups xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance">

<EmployeeGroup SK="1">
  <EmployeeGroupTree SK="1"/>
  <Code>AB_GP1</Code>
  <EmployeeGroup SK="3">
    <EmployeeGroupTree SK="1"/>
    <Code>AB1_G1</Code>
    <EmployeeGroup SK="13">
      <EmployeeGroupTree SK="1"/>
      <Code>TEST </Code>
      <EmployeeGroup SK="14">
        <EmployeeGroupTree SK="1"/>
        <Code>TEST2 </Code>
      </EmployeeGroup>
    </EmployeeGroup>
  </EmployeeGroup>
</EmployeeGroup>

<EmployeeGroup SK="2">
  <EmployeeGroupTree SK="2"/>
  <Code>AB_GP2</Code>
  <EmployeeGroup SK="4">
    <EmployeeGroupTree SK="2"/>
    <Code>AB2_G1</Code>
  </EmployeeGroup>
</EmployeeGroup>


<EmployeeGroup SK="5">
  <EmployeeGroupTree SK="3"/>
  <Code>CATGRY</Code>
</EmployeeGroup>

<EmployeeGroup SK="6">
  <EmployeeGroupTree SK="4"/>
  <Code>CSV   </Code>
</EmployeeGroup>

<EmployeeGroup SK="7">
  <EmployeeGroupTree SK="5"/>
  <Code>HEAP  </Code>
  <EmployeeGroup SK="8">
    <EmployeeGroupTree SK="5"/>
    <Code>H1    </Code>
  </EmployeeGroup>
  <EmployeeGroup SK="9">
    <EmployeeGroupTree SK="5"/>
    <Code>H10   </Code>
  </EmployeeGroup>
  <EmployeeGroup SK="10">
    <EmployeeGroupTree SK="5"/>
    <Code>H11   </Code>
  </EmployeeGroup>
  <EmployeeGroup SK="11">
    <EmployeeGroupTree SK="5"/>
    <Code>H12   </Code>
  </EmployeeGroup>
  <EmployeeGroup SK="12">
    <EmployeeGroupTree SK="5"/>
    <Code>H13   </Code>
  </EmployeeGroup>
</EmployeeGroup>

</EmployeeGroups>