Sales of wines declined in the late 1980s, but they began to grow again after the 1991 report that linked moderate consumption of alcohol, and particularly of red wine, with a reduced risk of heart disease.
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IMRAN MALIK
In choice C, does "caused" modifies "heart disease" from a structural perspective and thus distorts the meaning by consequence of a misplaced modifier? Further to your comments, choice D is incorrect as "started" modifies "red wine."
Actually, "caused" modifies "moderate alcohol consumption." This is because "caused" is the main verb of the clause, and "moderate alcohol consumption" is the noun of the clause. "and particularly of red wine" and "which was linked with a reduced risk of heart disease" both modify "moderate alcohol consumption."
Still, choice C has a structure that is odd and overly complicated. So it's easy to get confused about exactly what "caused' modifies. And often, if you feel confused about exactly what's modifying what, that's a sign that the answer choice may be wrong. (Lack of clarity is one of the most reasons a given choice is incorrect in SC.)
Also, I believe you meant to say that choice (E) is incorrect because of its use of "started." (There is no "started" in D). You're correct that "started" is one of the problems in (E), as "started" looks like it could either modify "red wine" or "reduced risk of heart disease." Ambiguous modifiers like that are of course incorrect.
2 Explanations