So we did the following to make it usable in XSLT transformations
1. Generated an XSD with the incoming XML and added a custom targetnamespace to the that xsd
2. Attached that namespace to the decoded string.
3. Created a BPEL variable with the XSD generated in step1.
4. Used oraext:parseXML function to parse the decoded string and assigned it to the BPEL variable created in step3.
5. Used that BPEL Variable in a transformation.
Please write to me if you require the sample code.
Have a nice day.