MAGOOSH Official Explanation:
Split #1: the object of "believe" has to be a "that" clause. In colloquial speech, one can drop the word "that", but in the formal language of the GMAT, this is unacceptable. We need to have the word "that" at the beginning of the clause. Choices (A) & (B) omit the word "that", and so are incorrect.
Split #2: the comparison following the words "much older Earth" ----
(A) compared to what they previously expected --- long & awkward
(B) than was previously expected --- elegant & correct
(C) compared to the previously expected --- long & awkward
(D) than was previously suspected --- elegant & correct
(E) than they previously suspected --- awkward
Technically the awkward versions could be correct, so we can't definitively eliminate anything on this basis, but we suspect none of these will be part of the correct answer.
Split #3: sequence of tenses. Lyell believed something in the past, and so the verbs describing the content of his belief must follow the rules of the sequence of tenses. The "underestimating" was done by theologians before Lyell's time, in Lyell's past, so this verb should be in the past perfect, "had underestimated." The "justifying" was in Lyell's future, so this verb should be in the conditional tense, "would justify." Only (A) & (D) have the first verb in the past perfect, and only (B) & (D) have the second verb in the condition. Therefore, only (D) has both verbs correct.
For all these reasons, (D) is the only possible answer.