D&C 77:12 says the earth was sanctified on the seventh day of creation just as it will be sanctified for the millennium. Does this mean that the earth was changed from Telestial (when prehistoric life could live and die – see Abr. Chp. 4) to Terrestrial before Adam was created on the seventh day? Abr. 5:5 says the Gods caused it not to rain while they counceled on the sixth day to finish their work on the seventh day (see Abr. 5:2 & 4:26). Does this mean that the Gods caused the 10,000 BC mega fauna extinction to eliminate all (not just mega) prehistoric fauna? If so, does this mean we know when prehistoric life was on the earth and what happened to it?
If by telestial state you mean spiritual, then yes. The earth was created spiritually before it was created temporally, just as everything else-
“For I, the Lord God, created all things, of which I have spoken, spiritually, before they were naturally upon the face of the earth…” Moses 3:5
Reading just the account in Abraham which you’ve referenced, the order in which things were done can be a mite confusing. It speaks of the Gods conversing or discussing the creation and how they will order it before they actually do so. If, for example, you read Abraham 5:4 you will see an end to the discussion and a beginning of action. This is right before your reference concerning the lack of rain. Let’s read both verses together-
According to all that which they had said concerning every plant of the field before it was in the earth, and every herb of the field before it grew; for the Gods had not caused it to rain upon the earth when they counseled to do them, and had not formed a man to till the ground.” Abraham 5:4-5
Read together, it seems the flora and fauna of the earth had not yet been created temporally. The account in Moses further clarifies this. Let’s read the entireity of Moses 3:5-
“And every plant of the field before it was in the earth, and every herb of the field before it grew. For I, the Lord God, created all things, of which I have spoken, spiritually, before they were naturally upon the face of the earth. For I, the Lord God, had not caused it to rain upon the face of the earth. And I, the Lord God, had created all the children of men; and not yet a man to till the ground; for in heaven created I them; and there was not yet flesh upon the earth, neither in the water, neither in the air;”
The lack of rain could not, in any way, be related to an extinction if there was not yet any temporal life on the earth. In both Abraham and Moses, the following verse describes a mist which moistened the land, instead of rain. This correlates nicely with the warm climate that would have been necessary for prehistoric life and could also be connected to the creation of the atmosphere. More likely is that the extinction of prehistoric life was caused at the time of the Fall.
Adam and Eve were in the Garden of Eden for an indefinite amount of time, and for that time they were in the presence of God which suggests the earth remained near Kolob. It is quite possible that the process of creation was continuing around them and was not really completed until they were cast out of Eden and the presence of their Father. Such would signify the earth being thrust into its terrestrial state with the expansion of the universe and coming to rest in our solar system after colliding with extra-terrestrial materials that would have created the moon and thus divided the night and day.
This would have altered the state of the waters and may have been when water began cycling between earth and atmosphere, allowing there to be rain. The account in Moses further suggests that the temporal creation of our current flora and fauna happened after the temporal creation of Adam and that the accounting of each “day” of creation may have only been related to the spiritual creation-
“And out of the ground I, the Lord God, formed every beast of the field, and every fowl of the air; and commanded that they should come unto Adam, to see what he would call them; and they were also living souls; for I, God, breathed into them the breath of life, and commanded that whatsoever Adam called every living creature, that should be the name thereof.” Moses 3:19
Of course, this is all just one possible explanation of the very complex accountings of the creation. We will likely reach the closest understanding we can of the creation through a careful study and comparison of all accounts- in Genesis, Moses, and Abraham- in combination with a careful study of the natural sciences. Any explanation we can devise, however, will merely be speculation and we will only be certain of the methods and order God used in the creation when such is clearly revealed and explained to us by Him.