If you have a text file which contains the escape character (\x1b / 27), and use that as the text file in Studio-Web step 1, you get this error from the GUI:
Doctoring the back-end to print the offending exception, I got this additional info:
PCDATA invalid Char value 27, line 492, column 24 (, line 492)
(My file only had 447 lines, but the last line had just char 27)
This means that Studio/readalongs/web_api.py gets invalid XML from create_ras_from_text() in the presence of an escape character in the text input.