Howdy! Happy to help!
Your sentence is correct although a little strange. For one, this woman is really really old.
She has been living here since that last earthquake of 1657.
Here the subordinate clause following the subordinate conjunction 'since' cannot stand on its own.(As specified by the rule in the article)
I think that you could communicate the same idea in a more concise and direct way:
"She has been living here since the earthquake of 1657."
Otherwise you seem to have a good handle on this idea. If you are looking for more practice or detail about this concept, I recommend reading this article:http://magoosh.com/gmat/2012/substantiv ... -the-gmat/
Let me know if I can be of more help!
Magoosh Test Prep