> which can be done like this:

Somehow the variable declaration got lost:

<xsl:variable name="verses" select="role/verse"/>

selecting from the parent element of the role elements.
> 
> <xsl:for-each-group select="$verses"
> group-starting-with="verse[empty(@part)] | verse[@part='beginning']">
>   <xsl:variable name="verse-number" select="position()"/>
>   <verse>
>     <xsl:for-each select="current-group()">
>       <part role="parent::role/@name">
>         <xsl:copy-of select="node()"/>
>       </part>  
>     </xsl:for-each>
>   </verse>
> </xsl:for-each-group>
> 
Regards,

Michael Kay
http://www.saxonica.com/
http://twitter.com/michaelhkay