If we leave out the word their, then I think the sentence ends up meaning what it was intended to mean. As it stands, though, I think it has several possible readings, all fairly absurd, of which your interpretation is the most salient. It could be taken to mean that modern snakes eat their own eggs. It could, if we give "like modern snakes" wider scope, mean that modern snakes, like prehistoric ones, eat dinosaur babies rather than eggs. And I think it could even mean that while researchers conclude that the prehistoric snake fed on dinosaur babies, modern snakes conclude that it fed on dinosaur babies' eggs, although that's a bit more of a stretch.
I'm squinting very hard to visualize your last reading. The impressive thing for me was the little word "their" made to span referents separated by 100 Mio years or so.
But Q. Pheevr, what about the reading in which modern snakes feed on researcher's eggs?
Ah, yes–I missed that one. And researchers do occasionally lay eggs, although generally in the idiomatic rather than the literal sense (unfortunately for the snakes).
Previous Previous post: Some referential ambiguity.