This one is pretty tricky, in my opinion. We’re mostly dealing with parallelism here, but it's not as straightforward as I’d like.
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A. banked with dirt to a height of
The underlined portion follows the word “and”, so we definitely need to think about parallelism. Here, the word that follows “and” is “banked.” In this case, "banked" is an adjective.
So what is “banked” parallel to? Well, “overlaid” is our nearest adjective, and that makes some sense: “its framework overlaid with poles… and banked with dirt to a height of three to four feet.” Not bad! That makes sense: the framework was banked with dirt. Keep (A).
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B. banked with dirt as high as that of
The only difference between (A) and (B) is the pronoun phrase, “that of.” “That” is a singular pronoun here, so it needs a singular antecedent. And we don’t have good candidates: “dirt” is the nearest singular noun, but that doesn’t make sense: “banked with dirt as high as the dirt of three to four feet.” Nope.
You can try the same thing with other singular nouns in the sentence (pine, cedar, bark, framework, house, etc.), but once you try to insert them into the sentence in place of “that”, you'll see that none of them make any logical sense. So (B) is gone.
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C. banked them with dirt to a height of
This is a little bit more subtle, but once “them” is added to the sentence, things get weird. The issue isn't necessarily that "them" is ambiguous (sure, there are a few different plural nouns that "them" could refer back to, but the nearest one, "slabs", is arguably OK). The real problem is that the parallelism doesn't really work. If "banked" is parallel to "overlaid", it doesn't make sense anymore: "its framework of poles... banked them with dirt"?!
OK, so what if "banked" is actually a verb, and it's parallel to "was"? That wouldn't make sense, either: "The single-family house constructed by the Yana... banked them with dirt." (C) is gone.
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D. was banked with dirt as high as
The verb phrase "was banked" follows "and", so it has to be parallel to some other verb phrase. "Was conical in shape" seems to be our best option, but that wouldn't make much sense, since it would imply that "The single-family house constructed by the Yana... was banked with dirt." And that's not quite right: the framework of poles was banked with dirt -- not the entire house. That's why it makes more sense to leave "banked" parallel to "overlaid", as in option (A). Eliminate (D).
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E. was banked with dirt as high as that of
(E) has the same pronoun error as (B), and the same parallelism/logic error as (D). So we’re left with (A).
I have a basic problem with this question. if we split the sentence and delete non-essential modifier we have
2)its framework of poles overlaid with slabs of bark, either cedar or pine, and banked with dirt to a height of three to four feet.