I've come up with a way to articulate the difficulties I'm having with DFDL for complex file formats.
 
This problem may not be that hard for someone with more XML, XPath or XQuery experience, so I'd apprecate it if you could look it over and if necessary even run it by your resident XML experts.
 
In case the emailer mangles all the line lengths, I've also attached the below as a file.
 
<!-- Example motivated by DFDL for IBM Format-VS -->
<!-- see http://tinyurl.com/3s2bq for details on IBM Format-VS -->
 
<!-- Logically, our data is this: -->
 
<ITEM>The first item</ITEM>
<ITEM>This is the second item</ITEM>
<ITEM>The third</ITEM>
 
<!-- That is, data having this "logical" schema -->
 
<sequence>
  <element name="ITEM" type="string" minOccurs="0" maxOccurs="unbounded"/>
</sequence>
 
<!-- But the below is the input data were starting from. What you see below simulates
     the structural issues of IBM Format-VS, but converting the problem into an XML to XML
     transformation problem -->
 
<BLOCK>
  <SEGMENT>
    <WHOLE/> <!-- a WHOLE segment holds a whole item (Duh!). This element is really a type tag. -->
    <DATA>The first item</DATA> 
  </SEGMENT>
</BLOCK>
 
<BLOCK>
  <SEGMENT>
    <FIRST/> <!-- a FIRST segment holds the first part of an item. -->
    <DATA>Thi</DATA>
  </SEGMENT>
</BLOCK>
 
<BLOCK>
  <SEGMENT>
    <MIDDLE/> <!-- a MIDDLE segment holds data from the center of an item -->
    <DATA>s is t</DATA>
  </SEGMENT>
</BLOCK>
 
<BLOCK>
  <SEGMENT>
    <MIDDLE/>
    <DATA>he sec</DATA>
  </SEGMENT>
</BLOCK>
 
<BLOCK>
  <SEGMENT>
    <LAST/> <!-- a LAST segment holds data from the end of the item.  -->
    <DATA>ond item</DATA>
  </SEGMENT>
  <SEGMENT>
    <WHOLE/><!-- This second segment in this block is a WHOLE segment. However
                 in general the 2nd segment of a block could be a WHOLE or the
                 FIRST segment of another multi-segment multi-block spanning item -->
    <DATA>Third item</DATA>
  </SEGMENT>
</BLOCK>
 
<!-- Some observations: -->
<!-- Data is organized into BLOCKs -->
<!-- Each block contains 1 or 2 SEGMENTs -->
<!-- Each SEGMENT is either a WHOLE item, or the item spans 2 or more SEGMENTs -->
<!-- Spanning data is broken on arbitrary boundaries across segments it spans -->
<!-- Spanning involves a FIRST, MIDDLE*, LAST segment structure. -->
<!-- MIDDLE* means zero or more MIDDLE segments. -->
 
<!-- The question: how can we express the transformation into the desired logical form?
     Or is this beyond the call of duty for DFDL?
     Goals include to be as declarative as possible, and ideally, do it as a set of
     XML Schema annotations in the GGF DFDL style.  -->
 
<!-- here's an XSD (untested) for the input data structure -->
 
<complexType name="Format_VS_t">
 <sequence>
   <element name="BLOCK" type="Block_t" minOccurs="0" maxOccurs="unbounded"/>
 </sequence>
</complexType>
 
<complexType name="Block_t">
      <sequence>
         <element name="SEGMENT" type="Segment_t" minOccurs="1" maxOccurs="2"/>
      </sequence>
</complexType>
 
<complexType name="Segment_t">
 <sequence>
  <choice>
    <element name="WHOLE">
    </element>
    <element name="FIRST">
    </element>
    <element name="LAST">
    </element>
    <element name="MIDDLE">
    </element>
  </choice>
  <element name="DATA" type="string"/>
 </sequence>
</complexType>