Which was the ancient time when gods and men used to dwell together on the earth?

Question

The Dharma Sutras of Apasthambha (supposedly) mentions that in ancient past the Gods and human beings used to live together on the earth. But, then the Gods performed sacred rites and as a result they attained the heavens.

In ancient times gods and men used to live together in this world. Then the gods went to heaven by performing rites, while men were left behind.* Those among them who perform rites in the same manner get to dwell in that world together with the gods and Brahman

Q1. Which was this ancient time when Gods and men used to dwell together on the earth? Do other scriptures like the Puranas etc shed any light on the issue?

Q2. If Gods attained heavens by performing sacred rites then why the humans did not do the same? What stopped them from doing the same?

Q3. Who used to live in the heavens when the Gods lived on the earth?

Answer 1

The answer may be found in the Brahmanas. Here is Satapatha Brahamana verse which alludes answers to your questions:

SB 6:1:2:11

And so they say, 'Pragâpati, having created these worlds, was firmly established on the earth. For him these plants were ripened 2 into food: that he ate. He became pregnant. From the upper vital airs he created the gods, and from the lower vital airs the mortal creatures.' In whatever way he created thereafter, so he created; but indeed it was Pragâpati who created everything here, whatsoever exists.

SB 6:1:2:36

As to this they say, 'For what object is this fire (altar) built? Having become a bird, he (Agni) shall bear me to the sky!' so say some; but let him not think so; for by assuming that form, the vital airs became Pragâpati 1; by assuming that form, Pragâpati created the gods 2; by assuming that form, the gods became immortal and what thereby the vital airs, and Pragâpati, and the gods became, that indeed he (the Sacrificer) thereby becomes

SB 3:1:1:1

They choose a place of worship. Let them choose (the place) which lies highest, and above which no other part of the ground rises 1; for it was from thence that the gods ascended to heaven, and he who is consecrated indeed ascends to the gods. He thus sacrifices on a place of worship frequented by the gods; but were any other part of the ground to rise above it, he would indeed be lowered while sacrificing: let them therefore choose (the place) which lies highest

As per SB, after having created heaven , earth, sky, plants, men and animals, Prajapti and Gods started to perform sacrifice. Men, animal, and plants become a mean of sacrifice out of which man was the first victim of sacrifice

SB 6:2:1:2

He saw those five animals,--the Purusha (man), the horse, the bull, the ram, and the he-goat. Inasmuch as he saw (pas) them, they are (called) cattle (pasu)

SB 6:2:1:18

A man (purusha) he slaughters first, for man is the first of animals; then a horse, for the horse comes after man; then a bull, for the bull (or cow) comes after the horse; then a ram, for the sheep comes after the cow; then a he-goat, for the goat comes after the sheep: thus he slaughters them according to their form, according to their excellence.

And since gods knew highest point to perform sacrifice and hence they went to heaven which men do not know yet

SB 3:1:1:1

They choose a place of worship. Let them choose (the place) which lies highest, and above which no other part of the ground rises 1; for it was from thence that the gods ascended to heaven, and he who is consecrated indeed ascends to the gods. He thus sacrifices on a place of worship frequented by the gods; but were any other part of the ground to rise above it, he would indeed be lowered while sacrificing: let them therefore choose (the place) which lies highest

Answer 2

Q1. Which was this ancient time when Gods and men used to dwell together on the earth? Do other scriptures like the Puranas etc shed any light on the issue?

it is RigVeda which describes in detail that gods (deva) and human being (manush)lived together. It also tells us that the first god was Agni which lived with humans since beginning but they were unaware of this. Rishi Angira was the first to find this secret (ref.R.V.5.11 (6) - tvam agne Angiraso guha...also RV.1.31(1) - tvam agne prathamo Angira rishir devo devanam bhava Shiva sakha). Other Rishis found Agni eveywhere - in water,in wood, etc. finally discovered its ulimate source 'Sun'. RigVeda also tells us that all other gods were actually first ancestors who brought humans a kind of social life from animal life(ref. RV.6.22. (2) - 'tamu nah purvye pitaro navagvah sapta vipraso abhi vaajyant.......This hymn addresses Indra meaning ' you are our (nah) earlier ancestor (purvye pitaro) going for battle ( abhi vaajyant) with seven Rishis of Navagva. Similar refences could be cited about Yama who is considered as head of ancestor; this is also confirmed by Avesta, a Zorastranian epic, depicting that Yama was the first king of the world.As their deeds were somewhat equalvalent to Agni i.e. betterment of human life, they were also called as deva. Some of them whose deeds were extra-ordinary, were equated with Sun like Indra(ref. R.V.4.58 (4) - Indra ekam Surya ekam jajan Venat ekam svadhya nisht takshu). Those opposed this process were called demons - god:demon is equivalent to arya: anarya.

Q2. If Gods attained heavens by performing sacred rites then why the humans did not do the same? What stopped them from doing the same?

Gods found that living at highest place is good. RigVeda mentions that Indra provided abode for devas at higher hills and lower lands for humans (martya/mortals)(Ref. That's why Himalaya is called as abode of gods - the heaven.

Q3. Who used to live in the heavens when the Gods lived on the earth?

Since gods created the heaven there is no question of existing heaven before gods.