HowTo reproduce the problem:

test.xsl file contents:
-------------------------------
<?xml version="1.0"?>
<xsl:stylesheet
   xmlns:xsl="http://www.w3.org/1999/XSL/Transform" version="1.0">

<xsl:template match="docs">
  <xsl:element name="out">
    <xsl:attribute name="test1">
        <xsl:value-of select="a"/>
    </xsl:attribute>
  </xsl:element>
</xsl:template>
</xsl:stylesheet>

test.xml file contents:
------------------------------
<?xml version="1.0"?>
<docs>
<a>X</a>
</docs>

Correct output of running Xalan processor on test.xml with test.xsl:
----------------------------------------------------------------------
<?xml version="1.0" encoding="UTF-8"?>
<out test1="X"/>

Output from running Xalan processor in the Mantis build:
----------------------------------------------------------
<?xml version="1.0" encoding="UTF-8"?>
<out
test1="<?xml version="1.0" encoding="UTF-8"?>
X"/>

Notice in the Mantis output, the XML PI '<?xml version="1.0" encoding="UTF-8"?>'
get included in the 'test1' attribute on the <out> element.
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