I've got the same problem. The error appears when you click any button created as a server control, when it postback and before any event of the control is fired.
It occurs only when you fill the XSL property directly in code, not when you fill it in the html page or you use the xsllink, even using exactly the same XSLT. I tried to assign the property in other methods/events along all the life cicle of the DFWP with the same problem.
Any idea?
In other way.... anybody knows how to find the code that is generating the error? I tried to use the Reflector to see inside the out-of-the-box DFWP, but I can't find the code that is generating the error.