My php.ini file can be found at:

http://freshsoftware.dyndns.info/scripts_for_sale/usps/php.ini

Thank you for this bug report. To properly diagnose the problem, we
need a short but complete example script to be able to reproduce
this bug ourselves. 

A proper reproducing script starts with <?php and ends with ?>,
is max. 10-20 lines long and does not require any external 
resources such as databases, etc. If the script requires a 
database to demonstrate the issue, please make sure it creates 
all necessary tables, stored procedures etc.

Please avoid embedding huge scripts into the report.

A sample code is:

http://freshsoftware.dyndns.info/usps/usps_xml_carrier_pickup_live.phps

I saw that. A (much) shorter, standalone reproduction script is required.

I can not make a complex script any shorter. In short the open_url function on line 100 connects to the USPS server. The startElement function on line 117 sets the array, and names the XML tree ID structure, The endElement function set the end of the tree info, and the CharacterDataHandler function captures the data between start and end functions. The xml_set_character_data_handler function is then used to read the data.

But the data is getting turncated.

My problem is very similar to bug 46699. And that is what the MAKE_TEST file shows.

https://freshsoftware.dyndns.info/~freshsoftware/scripts_for_sale/usps/make_test.txt

I don't really see how bug #46699 is related, besides being another xml_parse() 
bug -- it was a crasher related to namespace-aware parsers, and your issue 
involves neither crashing nor namespaces.

The more I look at this, the less it looks like a bug in PHP. This script behaves 
as expected (outputting "Bare text content" and "<this is some CDATA>", without 
the "truncation" you reported separately in ##php:

<?php
$xml = <<<EOX
<root>
    <element>Bare text content</element>
    <element><![CDATA[<this is some CDATA>]]></element>
</root>
EOX;

function cdata_handler($parser, $data) {
    if (trim($data)) {      // ignore whitespace
        var_dump($data);
    }
}

$parser = xml_parser_create();
xml_set_character_data_handler($parser, 'cdata_handler');
xml_parse($parser, $xml);
?>

You should follow this up with a support channel, such as ##php or those listed at 
http://www.php.net/support.php, as this bug system is not a support forum. If you 
are able to reduce this to a self-contained, short example (such as that above) 
that shows a clear regression from PHP 5.2 to 5.3, please reopen this bug with 
that example.

Thank you for your interest in PHP.

Dooooooooooooopppee. My complex script gets reduced to a simpler script. I will try it your way.