My dom4j fu is limited but here is what I came up with:
<mulexml:xml-to-dom-transformer returnClass="org.dom4j.Document" />
<expression-component><![CDATA[
bNode = message.payload.rootElement.addElement('B');
bNode.text = 'table 2';
message.payload.rootElement.elements().add(1, bNode.detach());
]]></expression-component>
<mulexml:dom-to-xml-transformer />
This works fine with Mule 3.4.0.