> Is their an LC policy against relying on externally located documents?
No. Absolutely not.
> W3C seems to have a fairly decent history of keeping their URLs
> persistent, and they do have a statement in regards to this document.
The problem is that w3c complains from time to time that their server (where
the xml.xsd file is located) is encountering an abnormally high number of
requests, and we have tracked that down, on more than one occasion, to
someone who is validating a large number of MODS records.