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Thanks daagh.

Is the exception rule I stated valid though for including because if we follow the standard rule for a comma + verb-ing modifier, including cannot modify a noun phrase?
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"Including' is definitely an exception to the verb+ing norms. It is usually added for citing random examples.
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Thanks daagh.

Is the exception rule I stated valid though for including because if we follow the standard rule for a comma + verb-ing modifier, including cannot modify a noun phrase?

Here, including plays the role of 'example'/such as! Including is a preposition which shows that certain elements are a part of whole.

I like to spend my time by performing different activities, including reading novel and watching tv.

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in E," including Varosha" should be next to Cyprus? Why still E is correct?
the Turkish-Cypriots are ready to hand back 9% of the 38% of Cyprus that they now occupy, including Varosha, a ghost resort town
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in E," including Varosha" should be next to Cyprus? Why still E is correct?
the Turkish-Cypriots are ready to hand back 9% of the 38% of Cyprus that they now occupy, including Varosha, a ghost resort town

Yes, 'including Varosha, a ghost resort town' should be next to 9% of the 38% of Cyprus. But there's a problem. 'that they now occupy' is a vital noun modifier. If you change the placement of this vital modifier, the meaning of the sentence will be changed.

Suppose, the Turkish-Cypriots are ready to hand back 9% of the 38% of Cyprus including Varosha, a ghost resort town that they now occupy . The meaning of the sentence is changed. 'that they now occupy' modifies the ghost resort town.

To maintain the original meaning, we need to place the vital noun modifier to which it actually modifies.
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Dear Friends,

Here is a detailed explanation to this question-
TargetMBA007
In principle, including Varosha, a ghost resort town, the Turkish-Cypriots are ready to hand back 9% of the 38% of Cyprus that they now occupy south of Famagusta.


A. including Varosha, a ghost resort town, the Turkish-Cypriots are ready to hand back 9% of the 38% of Cyprus that they now occupy

B. the Turkish-Cypriots are ready to hand back 9% of the 38% of Cyprus, including Varosha, that they now occupy a ghost resort town

C. the Turkish-Cypriots, including Varosha, a ghost resort town, are ready to hand back 9% of the 38% of Cyprus that they now occupy

D. that they now occupy, including Varosha, a ghost resort town, the Turkish-Cypriots are ready to hand back 9% of the 38% of Cyprus

E. the Turkish-Cypriots are ready to hand back 9% of the 38% of Cyprus that they now occupy, including Varosha, a ghost resort town

Meaning is crucial to solving this problem:
Understanding the intended meaning is key to solving this question; the intended meaning of this sentence is that the Turkish-Cypriots are ready to hand back 9% of the 38% of Cyprus that they now occupy south of Famagusta, a region that includes Varosha, a ghost resort town.

Concepts tested here: Meaning + Modifiers

• In the “phrase + comma + noun” and “noun + comma + phrase” constructions, the phrase must correctly modify the noun; this is one of the most frequently tested concepts on GMAT sentence correction.

A: This answer choice incorrectly uses "including Varosha" to modify "the Turkish-Cypriots", illogically implying that the ghost resort town of Varosha is part of the Turkish-Cypriots; the intended meaning is that the 9% of Cyprus that the Turkish-Cypriots are ready to hand back includes the ghost resort town of Varosha; please remember, in a “phrase + comma + noun” construction, the phrase must correctly modify the noun.

B: This answer choice incorrectly modifies "9% of the 38% of Cyprus" with "that they now occupy...Famagusta", leading to an incoherent meaning; the intended meaning is that the Turkish-Cypriots are ready to hand back 9% of the 38% of Cyprus that they now occupy south of Famagusta, a region that includes Varosha, a ghost resort town; please remember, in a “noun + comma + phrase” construction, the phrase must correctly modify the noun.

C: This answer choice incorrectly modifies "the Turkish-Cypriots" with "including Varosha", illogically implying that the ghost resort town of Varosha is part of the Turkish-Cypriots; the intended meaning is that the 9% of Cyprus that the Turkish-Cypriots are ready to hand back includes the ghost resort town of Varosha; please remember, in a “noun+ comma + phrase” construction, the phrase must correctly modify the noun.

D: The sentence formed by this answer choice alters the meaning of the sentence through the phrase "In principle that they now occupy"; the construction of this phrase leads to an incoherent meaning; the intended meaning is that the Turkish-Cypriots are ready to hand back 9% of the 38% of Cyprus that they now occupy south of Famagusta, a region that includes Varosha, a ghost resort town.

E: Correct. This answer choice correctly modifies "9% of the 38% of Cyprus" with "that they now occupy" and "including Varosha", conveying the intended meaning - that the Turkish-Cypriots are ready to hand back 9% of the 38% of Cyprus that they now occupy south of Famagusta, a region that includes Varosha, a ghost resort town.

Hence, E is the best answer choice.

To understand the concept of "Phrase Comma Subject" and "Subject Comma Phrase" on GMAT, you may want to watch the following video (~1 minute):


All the best!
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