UPDATE:UPDATE:
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Could this be what the webpart is complaining about? and if so how can i give the webpart access to the xslt?
Thanks
Nicholas
Update 3
I have tried using mapped folders to provision my XSL
and I can view the XSL through the browser ie browsing to the mapped folder.
<XslLink>/_layouts/xsl/newsportal.xsl</XslLink>
but the webpart generates this error in the browser
I have done a bit of reading around and found that webpart security has been enhanced in sharepoint 2010 and have found the following link which are suggesting that the way forward is to edit the web.config.
http://msdn.microsoft.com/en-us/library/cc768613.aspx
however I struggle to believe this is the truly the case that I need to lower the security levels to just set a predefined property of the webpart (XslLink) can someone please confirm or deny that this is the case.