If you take a closer look at the exception
org.xml.sax.SAXException: The markup declarations contained or pointed to by the document type declaration must be well-formed.
This type of exception occurs when a corrupt, missing or inaccessible DTD is referred to by your document.
First I would like you to verify that any DTD referred to by your application is actually online and available.
If your application validates a document by reading the DTD from the internet, JBoss will need internet access. Also make sure that your proxy settings are correct as they should be to allow access to outside DTD documents via JBOSS. Add -Dhttp.proxyHost=yourproxy
if you're using a proxy.