Thaks to all that replied: it was indeed too complicated an approach. The
final cut:

  <xsl:template match="A">
    <xsl:for-each select="B">
      <xsl:if test="@TYPE='PUB' or count(@*)=0">      
        <H2><xsl:apply-templates select="node()[not(self::C)]"/></H2>
      </xsl:if>
    </xsl:for-each>
  </xsl:template>

cheers,

-Bill


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