I would have chosen 1...

I think we can safely rule out 4 and 5. So why 3 over 1 or 2.

Let's look at 2 first.

2. "A deity must obey the laws of nature that the deity created." Incorrect. The passage states that devotees wanted an explanation as to why God allowed natural disasters and the attendant human suffering to occur. The conclusion is the paradox,

"If God is God, He is not good." (If God is all powerful, He is not good)
"If God is good, He is not God." (If God is good, He is not all powerful)

This answer choice provides an explanation for why natural disasters occur. Natural disasters occur because God has to obey the laws of nature. This implies that God is not all powerful. This is not an assumption because it does not support the conclusion presented. We need an answer that supports, "If God is all powerful, He is not good." or "If God is good, He is not all powerful." This answer leads to the conclusion that God is neither all powerful nor good.

1. "A deity cannot be both all-powerful and all-good at the same time." Incorrect. This is the answer that I chose. So why is this wrong? The best I can tell is that this answer choice is wrong because it follows from the conclusion. In other words, if this were a "Must Be True" question then this would be a correct answer. Since this is an assumption question we need an answer choice that leads to the conclusion and not one that follows from it.

3. "A deity is a supreme being who has the gifts of total power." Correct. This is basically the opposite of answer 2. If God has total power and natural disasters still occur then the conclusion follows that "If God is all powerful, He is not good". In stating the conclusion the author is assuming that God has the power to intervene but He chooses not to intervene.

I felt this question was more difficult than most others. I think a lesson to be learned from all this is that an assumption should not follow from the conclusion or be a restatement of the conclusion. Perhaps, the CR experts can shed more light on this...

I picked 3 (the official answer).

P1. The religious leaders might explain repeatedly why God allowed the bad things happened.
P2. These bad things were mystery to followers who perceived the deity as all-powerful and all-good.

P3. New famous statements:
"If God is God, He is not good"
"If God is good, He is not God".

From these two lines, we can assumed that the deity who perceived as all-powerful and all-good is in control of everything, both bad and good things. Answer 3 covers this assumption well: "A deity is supreme being who has the gifts of total power".