In July 2002, scientists announced the discovery of the

[sinhavis]

In July 2002, scientists announced the discovery of the first living creature on Earth to walk on four legs and which was 350 million years old.

A. In July 2002, scientists announced the discovery of the first living creature on Earth to walk on four legs and which was 350 million years old.

B. Scientists announced the discovery on Earth of the first living creature which walked on four legs and which was 350 million years old in July 2002.

C. Scientists announced the discovery on Earth of the first living creature in July 2002 which walked on four legs and which was 350 million years old.

D. In July 2002, scientists announced the discovery of the first living creature on Earth which walked on four legs and which was 350 million years old.

E. Scientists announced the discovery of the first 350 million-year-old living creature on Earth to walk on four legs in July 2002.

Answer is D.
Source online bestsamplequestions.com

My problem is till now my understanding is which always refers to the word just before it. In that case, which should refer "Earth" in D.

[JonathanSchneider]

I agree with you. I do not like this question very much. Be careful how much you change your understanding of GMAT grammar based on unverified sources. Personally, I believe that the OGs and our strategy guides are all that you need.