Hmm... Well the good news is I can reproduce your problem... the bad news is I don't yet know why!
It's strange as I've simplified the file you gave to this:
<?xml version='1.0' encoding='UTF-8'?>
Which can be parsed to produce this tree:
<Container 'GPS device'>
</Container 'GPS device'>
Why the original file doesn't work I don't yet know, but I've ruled out the Kmz handling (i.e. the kml text is being extracted correctly) so bear with me while I look into it for you.