The filter in the Portfolio Templates tool needs to be loosened to allow more mime types to be accepted as valid XSL files for selection. When you upload an XSL file, the mime type that will be assigned to the file is somewhat unpredictable, depending on things like the programs on the user's machine. Lately mine have been uploading as "application/xsl+xml", though I think they used to end up as "text/xsl". In any case, the Portfolio Template tool's filter seems to require that they be "text/xml" for the file to show up as selectable in the "Build Template" page (page 2 of 4). Noah Botimer says that the filter should be loosened to allow more mime types, as was done for the Forms tool. This seemingly minor issue is a really aggravating problem, since you have to both know and remember to change the mime type of the file by hand before you can use it. It should be back-ported to earlier versions of Sakai, at least as far back as 2.6.x.