I tried the solution. It definitely seems like the right direction. It did transformations of all the whitespace elements, as you said it would. thanks.

However, the transformation has an unintended effect of moving all attribute values to the content of an element.

For example
            <td width="40" />
            <td width="550">
               <p>
                  <whitespace lines="8" inches="1.25" />
                  <p align="right">

Was transformed to:
            <td>40</td>
            <td>
               550
               <p>
                  <p>

Try
<xsl:template match="node()">
  <xsl:copy>
        <xsl:copy-of select="@*"/>
    <xsl:apply-templates select="node()"/>
  </xsl:copy>
</xsl:template>

in stead of
<xsl:template match="node()">
  <xsl:copy>
    <xsl:apply-templates select="@*|node()"/>
  </xsl:copy>
</xsl:template>

Cheers
RH