I just tried to apply your new code for Merlin-23 and it's flushed out that the mega-sample target is now throwing an exception when it creates a non XSLT target (and so is the new 23).
I think this is something to do with the new optimisations, but I'll try and track it down later this week.
So it's going to take me a little while longer to get the 23 code into CVS :<.
Cheers,
Berin