A bit late, but I recently had the same issue as John Timm in creating an identity transform XSLT - to preserve the namespace of the original document elements in the output document you need to add a "namespace" attribute to your <xsl:element>, eg instead of:
<xsl:element name="{name()}">
use:
<xsl:element name="{name()}" namespace="{namespace-uri()}">
Hope that helps someone out there!
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