@Janedoe
I tried to research on the issue. With due respect, my research leads me to form a contrary opinion. It appears that the iron curtain rule is not exclusive to the principle of representation.
Article 992 also applies to a situation where no right of representation exists; like, in my given problem. The basis of D's right to succeed is Article 1003 - "If there is no descendants, ascendants, illegitmate children, or a surviving spouse, the collateral relatives shall succeed to the entire estate of the deceased in accordance with the following articles."
As with regards to my first and second questions, my research (rather review) of law on succession, leads me to conclude that D (being an illegitimate half brother) is not entitled to inherit from deceased C who is a legitimate child. REASON: Article 992
If a full blood brother survived with D and that brother is legitimate, he or she is entitled to inherit from C. But note, a full blood brother can also be illegitimate; like if before C's parents (who are also biological parents of that full blood brother) had a child before they married each other and one or both of said biological parent where not capacitated to marry; thus, legitimation will not result, classifies that child as a full blood brother of C, but illegitimate in status.
Honestly, my confusion started when I came across on the seemingly conflicting issue between Articles 902 and 992 of the Civil Code. Civil law writers applied article 902 to case of ab intestato.
My books on succession are a bit outdated: a 1989 edition of Justice Paras and a 1970 edition of Professor Caguioa. So, I went to the library; got hold of three (3) more books. But, it appears that they share the same answer like what is contained in my books.
My Caguioa book provides:
"...If the person to be represented is himself illegitimate, then his legitimate and illegitimate descendants may represent him; but if the person to be represented is legitimate, only his legitimate descendants can represent him because of the barrier or iron curtain establish in this article..."
With due respect to a well-known civilist, whose civil law books - I value like a Bible, I tend to disagree on this view or opinion. It is my position that Article 902 speaks of legitime and is applied only when there is a will. Hence, the right that is transmitted by the illegitimate child is only the right to the legitime. If there is a will, that portion should not be touched; otherwise, both the illegitimate and legitimate child of the sole illegimate child of the testator may question the will.
But, if there is no will, Article 902 should not be applied. Instead, Article 992, the iron curtain, creates a wall that an illegitimate child cannot inherit "...from the legitimate children or relatives of his father or mother..." Hence, only the illegitimate descendant may represent an illegitimate ascendant contrary to the opinion of Professor Caquioa, Justice Paras, and other Civil Law Books authors.
To my mind, there is really no conflict between 902 and 992. Article 902 applies when there is a will and Article 992 applies when there is no will. Thus, these articles should not be applied interchangeably; otherwise, confusion and conflict will result.
I made my conclusion in haste due to lack of time, but I appreciate any contrary opinion.
Please help, since If I made a wrong conclusion, I don't want my own civil law professor, Dean Aligada, to disown me. But, I remember he was not my professor in succession; it was Atty Legaspi. Nevertheless, I thank them both.
, but I really have no time to research at the moment. Help is greatly appreciated. Thanks in advance. 
