Question:
The Balearics, Canaries, and Morocco seem to be hopelessly isolated in this game.  Is this correct?

Answer:
No.  Consider the following official errata:

“A unit in the Balearic Islands, Canary Islands, or Spanish Morocco is not isolated if an overland supply line (of any length) can be traced from the unit to any friendly-owned and functioning port from which a naval-element line of supply can be traced back to a Rebel full general supply source.  For the purpose of this rule, a naval-element supply line may be traced from any port (not just major/great ports as specified in 12B4).

Example: The Insurgents have units on Mallorca (one of the Balearic Islands) and own the functioning port of Palma there.  However, the Insurgent player is unable at this time to trace a naval-element supply line from Palma back to an Insurgent full general supply source.  The Insurgent units on Majorca are therefore isolated.”

Source:
[AEG, Developer, 11-Mar-04]