extension functions returning temporary trees

I'm trying to return the string "<root>test</root>" from a .NET extension
written in C# to the Altova XML engine running XSLT 2.0.
What actually gets returned replaces the "<" with "& l t ;" (without the
spaces) and similarly for ">".  This, of course, means that XSLT 2.0 can't
implicitly convert the returned value to a temporary tree.

Has anyone else seen this problem and, if so, how have they fixed it?

Your help is much appreciated, I've been banging my head against the wall over
this for the past several days.