check out this
http://www.biglist.com/lists/xsl-list/archives/200405/msg00962.html
thread, it discusses very similar issue, also with few examples in it.

In short, using xsl:copy is not the best way to copy attribubutes over,
as it inserts namespaces related to the element being copied. Something
like

    <xsl:template match="*[not(namespace-uri())] | xhtml:*">
        <xsl:element name="{local-name(.)}">
            <xsl:apply-templates/>
        </xsl:element>
    </xsl:template>

may work better for you. (This was suggested to me by G. Ken Holman in
the thread I refered to above, and workes great)

--
Max Romantschuk
http://max.nma.fi/