Usage of prepositional Phrase as adverb

Neither of those is a simple question. Let's start with the pronoun issue.

First, pronoun ambiguity isn't as common a problem on real GMAT SC questions as it is on mock SC questions. When it really is an issue on the GMAT, it's often signaled by a split between a pronoun and a noun phrase (for instance, some answer choices might say "they" while others say "those professionals"). In fact, many correct answers have pronouns with more than one grammatically possible antecedent, but so long as the reader knows exactly which is intended, that's really no problem. So I'm inclined to worry less about ambiguity than are most people.

Second, well, you've got a fair point even so. A subject pronoun in a subordinate clause will generally refer to the subject of the dominant clause, if they agree in number, etc. "They" is the subject of a subordinate clause, so it refers back to...either "scientists" (because "scientists noted..." is the main clause of the whole sentence) or "rats" (because the "even though" subordinates "they had shown" to "rats...had begun").

I suppose that this sort of consideration could lead you to look for answers that cleared up this ambiguity by doing without that pronoun altogether. C and D are two such answers. As I wrote above though, I wouldn't expect this issue to bear much weight.

Alright, let's consider the modifier issue again. Why does "shown" modify "disease" rather than "signs"?

First, it's touching "disease." Now there are circumstances in which the noun modifier will modify the entire noun phrase, rather than just the closest noun ("signs of the disease" rather than just "disease"), but I don't think that this is one of those circumstances (see page 234 of our Sentence Correction Strategy Guide for Exceptions to the Touch Rule).

Second, even if we understand "shown" to modify "signs," we still have a problem. That just makes D suggest that there were some signs of the disease then shown, but that the rats were dying without them. But in fact, there were no such signs, as A makes clear.