Question

Which phrase in this excerpt from James Joyce's "Araby" is a participial phrase?

Answer 1

You seem to have every kind of verb form present in this selection. I'm going to list them all and what they do.

being blind: It is a participle and it is a participle phrase. But is it an adjective? 

was is a linking verb for the main clause. It is not a candidate at all.
set is the predicate of the subordinate clause beginning with  except not a candidate.

stood second main clause predicate verb. 

gazed a verb form for the main clause.

had died. Main clause verb. Not the answer.
having been long enclosed is close. Unfortunately it is a gerund phrase which is an object of a preposition (from). It likely is the second best answer.

hung main clause verb.

found main clause verb

The rest don't matter they are linking verbs or main clause verbs or subordinate clause verbs.

The only one you really could choose is being blind. It describes street.