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RESERVE 1 cup marshmallows for later use. Microwave remaining marshmallows and water in large microwaveable bowl on HIGH 3 to 4 min. or until marshmallows are puffed; stir until marshmallows are completely melted and mixture is well blended. (Caution: Mixture will be hot.)
ADD 1/4 cup shortening and vanilla to marshmallow mixture; stir until shortening is melted and mixture is well blended. Gradually add sugar, mixing well after each addition. Lightly coat work surface with remaining shortening. Add marshmallow fondant; knead until smooth.
SPREAD cornstarch onto clean work surface. Add fondant; roll to 1/8-inch thickness. Cut into 1/4-inch-wide strips with pizza cutter or sharp knife.
SPREAD frosting onto tops of cupcakes. Decorate with fondant strips and chocolate morsels to resemble mummies as shown in photo.