I'm posting this problem/solution so that anyone else that encounters this problem doesn't spend days investigating, like I did.
I created a solution that loads an XML document into a dataset and loops through and prints the content in the XML into a literalcontrol, like this:
'load xml into dataset
dsXML.ReadXml(Server.MapPath("/App_Data/punjabi.xml"))
. . .
'each row in the dataset adds to a placeholder
myPlaceholder.Controls.Add(New LiteralControl(strContent))
. . .
'part of XML that was causing this problem (slightly modified, of course).
<phrase>
<type>phrase</type>
<zone>zone1</zone>
<content><![CDATA[ this is some text<br /><br />Punjabi text: Go to the complete details ...