master.xml

<data>
  <entry>
    <p>Project 1</p>
    <content>This is some content</content>
  </entry>
    <entry>
    <p>Project 2</p>
    <content>This is some content</content>
  </entry>
    <entry>
    <p>Project 3</p>
    <content>This is some content</content>
  </entry>
    <entry>
    <p>Project 4</p>
    <content>This is some content</content>
  </entry>
    <entry>
    <p>Project 5</p>
    <content>This is some content</content>
  </entry>
    <entry>
    <p>Project 6</p>
    <content>This is some content</content>
  </entry>
    <entry>
    <p>Project 7</p>
    <content>This is some content</content>
  </entry>
    <entry>
    <p>Project 8</p>
    <content>This is some content</content>
  </entry>
</data>

master.xsl

<xsl:stylesheet xmlns:xsl="http://www.w3.org/1999/XSL/Transform" version="1.0">

  <xsl:output method="xml" indent="yes" />

  
  
  <xsl:template match="data">
    <xsl:for-each select="entry">
      <xsl:variable name="pos" select="position()"/>
    <xsl:if test="position() mod 4 = 1">
        <div class="panel">
            <div class="wrapper">
              <xsl:for-each select="//entry[position() >= $pos and position() <= $pos + 4]">
                <p id="{$pos}"><xsl:value-of select="p"/></p>
              	</xsl:for-each>
            </div>
        </div>
    </xsl:if>
    </xsl:for-each>
  </xsl:template>

</xsl:stylesheet>