I found the answer. In my stylesheet (not the xml, xsl file), I had to add
<xsl:stylesheet version="1.0" xmlns:xsl="http://www.w3.org/1999/XSL/Transform" xmlns:ps="http://schemas.microsoft.com/powershell/2004/04">
</xsl:stylesheet>
Original:
<xsl:stylesheet version="1.0" xmlns:xsl="http://www.w3.org/1999/XSL/Transform">
</xsl:stylesheet>
The xmlns:ps attribute is necessary for the interpreter to understand that this xml is a PowerShell CliXml export. If you don't do this, xsl won't understand what you are trying to do. It's odd, but apparently, it can't just interpret the xml.