It seems you cannot use the ~site or ~siteCollection tokens in an Element.xml when you deploy as a Sandboxed Solution. Has anyone ever seen this behaviour?
><sharepoint:SoapDataSource runat="server" SelectUrl="~site/blog/_vti_bin/lists.asmx" InsertUrl=""
The ~site token gets replaced by an empty string (i.e. disappears) instead of the site URL upon deployment. Why?