For example here is an example of how it would fail
main.xsl  (imports both include/utils-a, and include/utils-b) include/
  utils-a.xsl  (no imports here)
  utils-b.xsl  (imports utils-a)
utils-b has the following
<xsl:import href="utils-a.xsl"/>
When resolve gets called, base="", and href="utils-a.xsl" so 
my URIResolver doesn't know that it should look in the 
include directory to find utils-a.xsl
The value of base should be the absolute URI of utils-b.xsl.
Check that when your URIResolver selects utils-b.xsl, the Source object that
you return has its SystemId property set to the base URI of utils-b.xsl. It
might be that you are returning a Source with a null SystemId, and the
processor is using this as the base for the next call on the URIResolver.
Regards,
Michael Kay
http://www.saxonica.com/
http://twitter.com/michaelhkay 
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