Have you tried concat function of XSL? Heres a thread that might help you. http://devnet.interwoven.com/forums_vb/showthread.php?t=34963&forumid=11&highlight=concat
Is it possible you are getting too much out of $MODEL? I believe $MODEL will give you a fully qualified path where you want to insert the ~ somewhere in the middle. Try putting ~$MODEL{/Properties/Data/Datum[@ID='DCRPath']/DCR/record/DCRPath} into a variable then use substring-after(...) to get just the portion you want.
No, but....Take a look at this thread:http://devnet.interwoven.com/forums_vb/showthread.php?t=35284&forumid=66