I would say yes... cut well below the squishy spot, and if you still see 'bad color', keep cutting until you get a nice healthy ooze of white sap and normal looking tissues. Keep very dry and warm.

Thanks for such a quick response! Any idea if there is much of a survival rate after cutting? I sure hope so...I'll be really sorry to lose it, I enjoy it so much!

The chances of survival are pretty good as long as you get to healthy tissue. I have hacked off several of mine after a particularly bad freeze killed the tops and rotted several inches of plant. Often they will begin to branch at this 'cut-off' point.

Hi,I'm a new comer to this forum. I want to know what is the cause of the rotting Madagascar Palm ? And what should we do to prevent it later ?

Pluke,

External injury or overwatering/not-porous-enough soil (especially) are the usual suspects.