XSLT: Copy All, but 'cut-and-paste' some content

Background

A more more general version of my problem was recently posted but due to the quality of the post, it received no responses. Here's my attempt!

I have the following XML structure that I want to transform

Pre-processed XML

<schema>

    <!-- element to be imbedded -->

    <element name="tryCatch.catch">
        <complexType>
            <complexContent>
                <extension base="escalateContainer">
                    <attribute name="var" type="_var" />
                </extension>
            </complexContent>
        </complexType>
    </element>

    <complexType name="tryCatch">
        <complexContent>
            <extension base="scriptElement">
                <sequence>
                    <element name="try" type="escalateContainer" />
                    <element name="catch" type="tryCatch.catch" minOccurs="0" />
                    <element name="finally" type="escalateContainer" minOccurs="0" />
                </sequence>
            </extension>
        </complexContent>
    </complexType>

</schema>

...into the following structure:

Post XSLT-Structure

<schema>

    <complexType name="tryCatch">
        <complexContent>
            <extension base="scriptElement">
                <sequence>
                    <element name="try" type="escalateContainer" />

                    <!-- Change here! -->

                    <element name="tryCatch.catch" minOccurs="0">
                        <complexType>
                            <complexContent>
                                <extension base="escalateContainer">
                                    <attribute name="var" type="_var" />
                                </extension>
                            </complexContent>
                        </complexType>

                    </element>
                    <element name="finally" type="escalateContainer" minOccurs="0" />
                </sequence>
            </extension>
        </complexContent>
    </complexType>

</schema>

Overview of the Process

Basically, I just want to

1. Copy everything


2. 
   

   Then find all element children of a complexType that have a . in their name (by construction - I have ensured this pattern works interally in my XML). A simplified version of my match is:

   
   

   
   

   complexType.element.type = element.name

   
   

   
   


3. 
   

   Last, replace that element with the corresponding global element. Bonus points if the attributes on the element being replaced are also copied.

   
   

What I have So Far

<xsl:template match="@* | node()">

        <xsl:copy>

            <xsl:apply-templates select="@* | node()" />

        </xsl:copy>

</xsl:template>

<xsl:template match="schema">

    <xsl:for-each select="element">

        <xsl:variable name="self" select="current()" />

        <xsl:variable name="name" select="@name" />

        <xsl:for-each select="/schema/complexType//element[@type=$name]">   

            <xsl:copy-of select="$self" />

        </xsl:for-each>         

    </xsl:for-each>

</xsl:template>

I think I'm off to the right start - copy everything with the identity template, then process what I want to change. The problem is that my second template only returns the copied element! The match appears to work great, I just lose all the other content I'm trying to preserve.