I have been made aware of a bug in Xerces 2.6.2 on JRE 1.5.0_18: According to source code comments there is a bug in xerces that prevents it from parsing schemas with imports and includes correctly:
Xerces (used by JAXP in Java 1.5 and later) does not correctly parse composite schema, (i.e. schema containing <import> and <include> elements) unless the schema are first written to disk files. Writing schema to disk files, forces us to re-write each <import> and <include> element's schemalocation attribute to reference disk files instead. I have been searching the Bugzilla reports to determine whether this has been fixed or even ever reported, but I cannot find anything that seems directly related. I just wanted to know if this has been fixed between 2.6.2 and the current version, as an upgrade would obviously be the simplest fix, or if it needs to be reported. Thank you.