I would create a view on SQL Server side that transforms the xml data into a table and query the view.
You could also use that statement directly inside SSRS to query the data but I think it would be more efficient to do it on SQL Server side.
Something like the following:
CREATE VIEW testxml as
t.c.value('@lname','varchar(30)') AS c1,
data.nodes('MyXML/Books/BookType/BooksOnType/Author') as t(c)
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