Dr Stone, author of Hindu Astrology and other books, writes:
"Panini gives rules for the Vedic language where it differs from the Sanskrit he is codifying, under the rubric chandasi. So it is older. Panini also refers to older grammarians of Sanskrit. That much is clear. So I see no problem with Sk. developing from the Vedic language, which was part of the Indo-European family of languages.
A. L. Basham (The Wonder that was India, p. 62) says Rudravarman left one of the earliest dated inscriptions, in correct Sk. of c. AD 150. M. M. Ninan (on the web, The Development of Hinduism, chap. 4) quotes R. Basak, ‘Inscriptions: Their Literary Value I’, in Cultural Heritage of India, vol. 5, p. 397f, saying the Sk. is not all correct. So this is not clear."
My comment on the above is that, whether or not the Sanskirt of this epigraph of circa 150 AD is correct, what we are discussing is the nature of that language in the 2nd century AD and not the 2nd or 3rd millennium BC.
In other words, there is no evidence here which helps us to date Panini or anyone else in any more helpful way.
Clearly, Sanskrit developed out of the early Indo-Aryan languages. The question is when did it do so?
If the earliest epigraphs we have are from the 2nd c AD, and Sanskrit epigraphs take over from Prakrit epigraphs only after the 3rd c AD, that indicates a language rising to prominence only then.
All that throws no light on my question: how do we know that the Vedas were developed more or less at the same time and not over hundreds or thousands of years?