why does the Xdocument give me a utf16 declaration?

StringWriter advertises itself as using UTF-16. It’s easy to fix though:

public class Utf8StringWriter : StringWriter
{
    public override Encoding Encoding { get { return Encoding.UTF8; } }
}

That should be enough in your particular case. A rather more well-rounded implementation would:

• Have constructors matching those in StringWriter
• Allow the encoding to be specified in the constructor too