who is right?

This sounds to me like a "collective noun" situation--like army, committee, team, etc.

One of my English handbooks (McGraw-Hill) says this about that:

These collective nouns take a singular verb and singula pronouns when the collection of individuals is thought of as a unit. However, they take a plural verb and plural pronouns when the members of the group are though of as individuals, acting separately.

SO, I would say that either could be used, depending...

Example: A large percentage of good students are entering the professions.
As opposed to: A large percentage of good students is the result of good teaching.

Or something like that. Maybe someone can come up with more convincing examples. Anyhow, just a thought.

alan - they may sound more natural sounding, but they are technically INcorrect. However, as I said in my original post, more people are using are nowadays.

BTW, in each of your examples one just needs to change 'are' to 'is'.

I don't think it is technically incorrect to use "are", any more than it would be wrong to say "Chelsea are the cup holders", for example. It's just the way it is in English.

Many of the good students are...
A large percentage of the student body is...

See point #11 here

This kind of "pluralization by proximity" is a frequent bone of contention in style / grammar / usage guides. Most will tell you to do precisely what #13 proposes: change the awkward phrasing of the original sentence to eliminate the ambiguity.

When you use the term "A large number" you are naturally speaking of more than one. The correct word, grammatically, in this case would be "are" because you are referring to more than one. An example of using "a large number is" where it would be correct, is where (say) one might say "a large number is easier to read than a small number". Satchie, I agree with you and your reference but my point is that the "percentage" referred to hear is not just a number but a collective noun or adjective for several people.

Can anyone really back up an argument that "a large percentage of students is good students" It's not the large percentage that is the subject but the students

see #13....

While "Chelsea are the cup holders" is normal in British English, US speakers would always say "Chelsea is the cup holder." Actually, Americans probably wouldn't refer to "cup holders," but constructions like "Ford is introducing a new line of fuel-efficient cars" would be the norm, never "Ford are introducing ...."

zz -- yes you are right but Chelsea is singular -- it's the club, so it would be valid to say is because you are saying "the club" Chelsea is the cupholder. Again Ford is the Ford Motor Company -- again singular.

I can't imagine anyone saying "A large percentage of students is immigrants," or "A large percentage of students is failing."

My old American Heritage Dictionary says "The number of the noun that follows per cent or percntage, or is understood to follow them, governs the choice of verb: Forty per cent of his estate is in securities. A large percentage of the patients are chldren." As far as I know, that is the rule that is universally followed by writers of English. I've never seen anything different.