It seems that XbaI is blocked by overlapping dam methylation in this case. If the recognition site is preceded by GA or followed by TC (in your case, preceded by GA) dam methylase GATC will overlap the XbaI site TˆCTAGA: blocked are ga TˆCTAGA and TˆCTAGAtc. There are two alternatives to choose for you:
1) Use a dam deficient strain like GM2163((E4105S) or JM110 cell to amplify the DNA first before digestion
2) using PCR amplify the insert only and digest it by XbaI to avoid the XbaI methylation.