This problem manifests with two sets of symptoms:
Clicking Next on the WSDL File panel does not go to the next panel, and an exception is thrown:
On Create Packaged Endpoint panel, select Create Web Service Endpoint and Package. Clicking Finish on the Next Steps panel does not create the Endpoint module in the output directory, and an exception is thrown:
The problem is that xalan.jar, which contains the XPathAPI.class, is missing from the CLASSPATH. Note that this problem does not exist with JDK 5.0.
Add xalan.jar to the CLASSPATH includes for the s1as-deploytool process of install_dir/lib/processLauncher.xml; for example:
includes="appserv-assemblytool.jar,activation.jar,appserv-admin.jar, appserv-cmp.jar,appserv-rt.jar,j2ee.jar,jaxrpc-impl.jar,appserv-ext.jar, deployhelp.jar,admin-cli.jar,dom.jar,xercesImpl.jar, xalan.jar"