Standalone does not mean "don't retrieve the external subset" -- it just means "we promise that our document contents (defaults, entities, will not be changed by the external subset, so if that's all you need you don't _have_ to retrieve it." In fact, even a nonvalidating parser may try to retrieve the external subset, in order to support datatype information such as IDs. See the XML REC, section 2.9, for a detailed description of what standalone means.
The XML Recommendation doesn't actually define a "don't even try to retrieve it" mode. Nor does Xerces, though it can be forced into that mode by installing an EntityResolver which blocks the DTD retrieval. And XSLT, in particular, tends to assume it _does_ know what is and isn't an ID. In any case, Standalone is handled by the parser, long before Xalan sees the data. As far as I know, we don't have any control over it.
