Mdmzd - 3:19 am on May 18, 2013 (gmt 0)
Just an Update:
I contacted my webhost again and after a large number of back and forth replies, I get this:
thank you very much for sharing your experience with us. I'm contacting you regarding the survey you have filled out about our services. I've checked your website and found the issue causing it. On this server, there is nginx server running as a frontend of apache webserver. Because nginx was configured to handle all static content ( including .html and .htm code ), the includes weren't processed properly. I've configured nginx to not process the .htm and .html files but forward them to apache server and now the includes are working as you can see."
My Includes are working now.
Thank you for your help so far - you have been more responsive and more helpful than my webhost.