I found the same issue.

It was solved with an upgrade to PERL 5.8, however the intall of 5.8
broke many other things, but at least it was all eventually tracked down
and now I have no UTF8 problems.

I know of no fix in Template Toolkit short of a code rewrite.

Tosh
-- 
Twelve Hundred Group
http://www.1200group.com/

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