Ron,

I don't know where it came from, but...

KML allows you to create Polygons with holes by designating an outer and inner boundary. I have a couple examples in this Thread.
Here is what it should look like:
Code:

---

 <Polygon>
<outerBoundaryIs>
<LinearRing>
<coordinates> ... </coordinates>
</LinearRing>
</outerBoundaryIs>
<innerBoundaryIs>
<LinearRing>
<coordinates> ... </coordinates>
</LinearRing>
</innerBoundaryIs>
</Polygon> 

---

p.s. You can make multiple holes in one Polygon if you want.