Correct option is D
The correct tense is
had been working.
The improved sentence is:
He had been working for an hour when I found him sleeping on the couch.
Explanation:
The sentence describes a continuous action ("work") that was in progress before and led up to another past action ("I found him").
This requires the
past perfect continuous tense ("had been working").
"Had been working" establishes that the work started in the past and was ongoing.
"When I found him" is the simple past event that interrupted the ongoing action.
The original verb "work" is in the simple present tense, which is incorrect for describing a past event.