Summary of problems:
The claim that air sacs in evolving birds would put a hole in the a diaphragm and lead to a nonfunctional, fatal intermediate, is based on selective quoting of a single sentence from a scientific publication from 1997; the conclusions in that publication are more complicated than one might guess from reading that single out-of-context sentence. Furthermore, Explore Evolution ignores more recent findings that have overturned the idea that the dinosaur ancestors of birds even had diaphragms to damage.
Full discussion:On p. 137 of Explore Evolution, the authors argue that the radical transformation of the lung from reptilian to avian seems improbable. Part of the argument goes like this.
Finally, what happens to the diaphragm? The reptiles thought to be the ancestors of birds almost certainly had a diaphragm breathing system (footnote 8). According to many evolutionary biologists, changing from a diaphragm lung system to a flow-through lung would require changing and increasing the musculature of the reptile's chest. At the same time, the diaphragm would need to gradually go away. This poses a fundamental problem. Evolutionary biologist John Ruben points out that the earliest stages of this transformation would have required a hole or hernia in the reptile's diaphragm. This would have immediately compromised the entire system and led to certain death for any animal unfortunate enough to possess this non-functioning intermediate structure.Explore Evolution, p. 137.
Footnote 8 refers to Ruben et al. (1997), Science 278:1268-1269 (actually 1267-1270), and quotes from the article.
8. "Therapod dinosaurs like modern crocodiles, probably possessed a bellows-like septate lung, and that lung was probably ventilated by a hepatic-piston diaphragm."John A. Ruben, Terry D. Jones, Nicholas R. Geist, W. Jaap Hillenius, (1997) "Lung structure and ventilation in theropod dinosaurs and early birds," Science 278:1268-1269. Explore Evolution, p. 140, note 8, quoting Ruben, et al. 1997.
Note that "Therapod" is a misspelling of "theropod." Also, the correct page numbers for the article are pages 1267-1270. The authors of Explore Evolution managed to cram about five typos into their short quote of Ruben, et al., so for the sake of correctness, as well as including the ellipsed text and the rest of the sentence, here is the exact quote from the original Science article, which might be enough to trigger a question in the mind of a student in a truly inquiry-based activity.
These observations, combined with the occurrence among theropods of a distinct, relatively vertical, crocodile-like, highly elongate pubis (Figs. 4 and 5), as well as well-developed gastralia, provide evidence that theropod dinosaurs, like modern crocodiles, probably possessed a bellows-like septate lung and that the lung was probably ventilated, at least in part, by a hepatic-piston diaphragm that was powered by diaphragmatic muscles that extended between the pubic bones and liver.
The authors of Explore Evolution have miscast the conclusions. Ruben, et al. are basically arguing that the theropod dinosaurs are not the earliest ancestors of birds. This position was highly unpopular in the scientific community in 1997, and is extremely unpopular now the number of holdouts against the idea that birds are descended from theropod dinosaurs can be counted on one hand. In the 1997 Science paper, Ruben, et al. argued that there is a logical problem with an intermediate form between purported ancestors (theropod dinosaurs, which allegedly possessed hepatic-piston diaphragms) and modern birds. But they also argued that theropod lung physiology was not consistent with endothermy [warm-bloodedness], a character that might be important in creatures (like birds and their ancestors) which are capable of flight. Here is the meat of Ruben, et al.'s conclusion section:
Recently, conventional wisdom has held that birds are direct descendants of theropod dinosaurs. However, the apparently steadfast maintenance of hepatic-piston diaphragmatic lung ventilation in theropods throughout the Mesozoic poses fundamental problems for such a relationship. The earliest stages in the derivation of the avian abdominal air sac system from a diaphragm-ventilating ancestor would have necessitated selection for a diaphragmatic hernia in taxa transitional between theropods and birds. Such a debilitating condition would have immediately compromised the entire pulmonary ventilatory apparatus and seems unlikely to have been of any selective advantage.
In other words, Ruben, et al. are not saying that this poses an insurmountable obstacle for any theory that postulates evolution of the bird lung. They are merely saying that this logic, as well as the arguments against endothermy in putative ancestors, argues against the specific theropod-bird ancestral connection. Birds (with their unique lungs and high oxygen requirements) must, by this logic, be descended from other ancestors. And even that conclusion generated almost immediate controversy. In November of 1998 three critiques of this paper, along with a rebuttal by Ruben, et al., appeared in Science (281(5373):45-48). Interestingly, these focused primarily on the conclusions about endothermy, rather than on the idiosyncratic diaphragm anatomy issue highlighted by the authors of Explore Evolution. Evidence has continued to accumulate against Ruben, et al.'s claim that theropod dinosaurs had diaphragms (see below).
Finally, since 1997 many spectacular fossils (both of birds and dinosaurs thought to be ancestral to birds) have been discovered, but none of these more recent findings are discussed in Explore Evolution, even though many of them (e.g. O'Connor & Claessens, 2005. Nature 436 (7048): 253-256) provide evidence that further argues against the conclusions of the 1997 paper of Ruben, et al.