Hi,
The $this->xml = simplexml_load_string($xml); line is at line 139 in my version, and just above it is the code that tries to fix this issue, starting at line 125.
If you don't have this in your code, could you try to pickup the latest 2.0 (or 2.1-beta) from this site (from resources->Downloads)
If you have this code, it doesn't solve your particular issue, would you mind setting $development to true in config.php (line 26 ) and make sure the debug log file (defined on line 33) is at a location the webserver has write permissions, and send the contents of the log to me, or post it here?