That PITS issue link doesn't work anymore since you upgraded your site.
Could you please update? I'd like to know the status of this issue.
The solution provided in the post is not completely satifying...
The generated sitemap is still pointing to the /LANGUAGE/HOME and not to /LANGUAGE/ URL...
So Google is told (by the sitepage) the homepage can be found at /LANGEAGE/HOME and we are directly pointing it with an 301-redirect to /LANGUAGE..
So google gets confused?!?! (so are we ;P)