[xsl] Template removes non-duplicate elements

["Mark Wilson" <mark@xxxxxxxxxxxx>]

My attempt at duplicate removal is failing in that it removes more than I 
want it to. Listing 2 is the input file. The output file should have one of 
the two duplicate initial <item>s removed (Listing 1), everything else 
should stay. My broken template is in Listing 3. It removes one of the 
duplicates and two of the three non-duplicate  <Item> s. (see Listing 4).

Can someone help me fix my template?
Thanks,
Mark

Listing 1.
<Item>
       <Heading entry="subject">Monasteries</Heading>
       <Xref xref="see">
           <Heading entry="subject">Abbeys and Monasteries</Heading>
       </Xref>
   </Item>

Listing 2.

<List>
<Item>
       <Heading entry="subject">Monasteries</Heading>
       <Xref xref="see">
           <Heading entry="subject">Abbeys and Monasteries</Heading>
       </Xref>
   </Item>
   <Item>
       <Heading entry="subject">Monasteries</Heading>
       <Xref xref="see">
           <Heading entry="subject">Abbeys and Monasteries</Heading>
       </Xref>
   </Item>
   <Item>
       <Heading entry="subject">Abbeys and Monasteries</Heading>
       <Level1>
           <SubDiv1>St Nicholas. Postal Card</SubDiv1>
       </Level1>
   </Item>
   <Item>
       <Heading entry="subject">Abbeys and Monasteries</Heading>
       <Level1>
           <SubDiv1>Porta Coeli</SubDiv1>
           </Level1>
   </Item>
   <Item>
       <Heading entry="subject">Abbeys and Monasteries</Heading>
       <Level1>
           <SubDiv1>Porta Coeli</SubDiv1>
       </Level1>
   </Item>
   <Item>
       <Heading entry="subject">Abbeys and Monasteries</Heading>
       <Level1>
           <SubDiv1>Strahov</SubDiv1>
           <Level2>
               <SubDiv2>Strahov Madonna</SubDiv2>
                 </Level2>
       </Level1>
   </Item>
   </List>

Listing 3.
<xsl:stylesheet xmlns:xsl="http://www.w3.org/1999/XSL/Transform"; 
xmlns:xs="http://www.w3.org/2001/XMLSchema"; exclude-result-prefixes="xs" 
version="2.0">
       <xsl:strip-space elements="*"/>

<xsl:template match="@* | node()">
    <xsl:copy>
      <xsl:apply-templates select="@* | node()"/>
    </xsl:copy>
  </xsl:template>

   <xsl:template match="/">
       <List>
           <xsl:for-each-group select="//Item" group-by="concat(Heading, 
Xref/Heading)">
               <xsl:copy-of select="current-group()[1]" 
copy-namespaces="no"/>
           </xsl:for-each-group>
       </List>
   </xsl:template>

</xsl:stylesheet>

Listing 4.
<List>
   <Item>
       <Heading entry="subject">Abbeys and Monasteries</Heading>
       <Level1>
           <SubDiv1>St Nicholas. Postal Card</SubDiv1>
       </Level1>
   </Item>
   <Item>
       <Heading entry="subject">Monasteries</Heading>
       <Xref xref="see">
           <Heading entry="subject">Abbeys and Monasteries</Heading>
       </Xref>
   </Item>
</List>