In choice (A), the conjunction "but" correctly establishes a contrast between two independent clauses in this sentence. The verb form "did take" refers correctly to past tense events and establishes the contrast between what the Grateful Dead did not do and did do.
Choice (A) is clear and correct.
In choice (B), the presence of the conjunction "and" requires what follows to be an independent clause, since coordinating conjunctions such as "and" join independent clauses. However, the phrase that follows isn't an independent clause, because we don't have a basic subject/verb pair.
We can eliminate choice (B).
Choice (C) uses the present verb tense in "they take," but the verb should be past tense, since the sentence describes what the Grateful Dead did and didn't do in the time period around 1969.
We can eliminate choice (C).
In choice (D), we have a run-on sentence, because there is no conjunction between the first independent clause (ending with "long jam") and the second independent clause (starting with "they took"). Both clauses are independent clauses because they have subject/verb pairs and they are not introduced by a subordinating conjunction, such as "because."
We can eliminate choice (D).
In choice (E), the phrase beginning with the word "taking" is a participial phrase that modifies "Grateful Dead." The construction is grammatically valid, but it fails to convey the meaning of the sentence correctly. As written, the modifier appears to give additional information or elaboration to the first point, whereas the intended meaning is a contrast with the first clause. We can eliminate choice (E).
The correct answer is (A).