A StreamReader that replaces invalid XML characters. This enables you to use XmlReader for files which contain i.e. control chars.

InvalidXmlCharacterReplacingStreamReader.cs

// slightly updated version of https://stackoverflow.com/a/30351313/1200847
// uses .Net 4.0 function XmlConvert.IsXmlChar
// supports Async

public class InvalidXmlCharacterReplacingStreamReader : StreamReader
{
    private readonly char _replacementCharacter;

    public InvalidXmlCharacterReplacingStreamReader(string fileName, char replacementCharacter) : base(fileName)
    {
        _replacementCharacter = replacementCharacter;
    }

    public InvalidXmlCharacterReplacingStreamReader(Stream stream, char replacementCharacter) : base(stream)
    {
        _replacementCharacter = replacementCharacter;
    }

    public override int Peek()
    {
        var ch = base.Peek();
        if (ch != -1 && IsInvalidChar(ch))
        {
            return _replacementCharacter;
        }
        return ch;
    }

    public override int Read()
    {
        var ch = base.Read();
        if (ch != -1 && IsInvalidChar(ch))
        {
            return _replacementCharacter;
        }
        return ch;
    }

    public override int Read(char[] buffer, int index, int count)
    {
        var readCount = base.Read(buffer, index, count);
        ReplaceInBuffer(buffer, index, readCount);
        return readCount;
    }

    public override async Task<int> ReadAsync(char[] buffer, int index, int count)
    {
        var readCount = await base.ReadAsync(buffer, index, count).ConfigureAwait(false);
        ReplaceInBuffer(buffer, index, readCount);
        return readCount;
    }

    private void ReplaceInBuffer(char[] buffer, int index, int readCount)
    {
        for (var i = index; i < readCount + index; i++)
        {
            var ch = buffer[i];
            if (IsInvalidChar(ch))
            {
                buffer[i] = _replacementCharacter;
            }
        }
    }

    private static bool IsInvalidChar(int ch)
    {
        return IsInvalidChar((char)ch);
    }

    private static bool IsInvalidChar(char ch)
    {
        return !XmlConvert.IsXmlChar(ch);
    }
}