You don't need two kind of markers -- just one is sufficient:
<xsl:stylesheet version="1.0"
xmlns:xsl="http://www.w3.org/1999/XSL/Transform">
<xsl:output omit-xml-declaration="yes" indent="yes"/>
<xsl:strip-space elements="*"/>
<xsl:key name="kPage" match="SAMPLE[not(@TYPE='Normal')]"
use="generate-id(preceding-sibling::SAMPLE[@TYPE='Normal'][1])"/>
<xsl:template match="node()|@*" name="identity">
<xsl:copy>
<xsl:apply-templates select="node()|@*"/>
</xsl:copy>
</xsl:template>
<xsl:template match="SAMPLE[@TYPE='Normal']">
<page>
<xsl:copy-of select=".|key('kPage', generate-id())"/>
</page>
</xsl:template>
<xsl:template match="SAMPLE[not(@TYPE='Normal')]"/>
</xsl:stylesheet>
when this transformation is applied on the following XML (The provided one, made well-formed, with one more element added, and with no "PAGESPLITTER"):
<SAMPLEFORM>
<SAMPLE ID='1' TYPE='Normal'>
<DATA>1</DATA>
</SAMPLE>
<SAMPLE ID='2'>
<DATA>2</DATA>
</SAMPLE>
<SAMPLE ID='3' TYPE='Normal'>
<DATA>3</DATA>
</SAMPLE>
</SAMPLEFORM>
the wanted, correct result is produced:
<SAMPLEFORM>
<page>
<SAMPLE ID="1" TYPE="Normal">
<DATA>1</DATA>
</SAMPLE>
<SAMPLE ID="2">
<DATA>2</DATA>
</SAMPLE>
</page>
<page>
<SAMPLE ID="3" TYPE="Normal">
<DATA>3</DATA>
</SAMPLE>
</page>
</SAMPLEFORM>