RESOLVED. Rewrote the entire main template, but it works now. I had been looking at it too long and too closely to see the problem. Seems easy now.
Code:
<?xml version="1.0" encoding="utf-8"?>
<xsl:stylesheet version="2.0" xmlns:xsl="http://www.w3.org/1999/XSL/Transform" xmlns:xdt="http://www.w3.org/2005/02/xpath-datatypes">
<xsl:param name="project"/>
<xsl:param name="today"/>
<xsl:template match="/">
<xsl:for-each select="//calendar/event/program[@id=$project]">
<xsl:sort select="../evdate" order="ascending" data-type="number"/>
<xsl:if test="../evdate >= $today and position() = 1">
<xsl:element name="h1">
<xsl:attribute name="class">side</xsl:attribute>
UPCOMING MEETING
</xsl:element>
<xsl:element name="ul">
<xsl:attribute name="class">sbox</xsl:attribute>
<xsl:element name="li">
<xsl:element name="b">
<xsl:attribute name="style">color: #a77909</xsl:attribute>
<xsl:call-template name="format-date"/> :: <xsl:value-of select="../evstart"/>-<xsl:value-of select="../evend"/> ::
</xsl:element><xsl:value-of select="../evname"/> at <xsl:value-of select="../location"/>
</xsl:element>
</xsl:element>
<xsl:element name="div">
<xsl:attribute name="class">hrbrk</xsl:attribute>
</xsl:element>
</xsl:if>
</xsl:for-each>
</xsl:template>
<xsl:template name="format-date">
<xsl:variable name="d">
<xsl:value-of select="../evdate"/>
</xsl:variable>
<xsl:call-template name="long_date">
<xsl:with-param name="date" select="$d"/>
</xsl:call-template>
</xsl:template>
<xsl:template name="long_date">
<xsl:param name="date"/>
<xsl:value-of select="substring($date, 7, 2)"/>#160;
<xsl:variable name="month" select="substring($date, 5, 2)"/>
<xsl:choose>
<xsl:when test="$month=01">January</xsl:when>
<xsl:when test="$month=02">February</xsl:when>
<xsl:when test="$month=03">March</xsl:when>
<xsl:when test="$month=04">April</xsl:when>
<xsl:when test="$month=05">May</xsl:when>
<xsl:when test="$month=06">June</xsl:when>
<xsl:when test="$month=07">July</xsl:when>
<xsl:when test="$month=08">August</xsl:when>
<xsl:when test="$month=09">September</xsl:when>
<xsl:when test="$month=10">October</xsl:when>
<xsl:when test="$month=11">November</xsl:when>
<xsl:when test="$month=12">December</xsl:when>
<xsl:otherwise>INVALID MONTH</xsl:otherwise>
</xsl:choose>#160;
<xsl:value-of select="substring($date, 1, 4)"/>
</xsl:template>
</xsl:stylesheet>