"No idea what the "D" was supposed to stand for"
Trying to find a rationale for EMD model designations is an idiot's game, but... I think it stands for "diesel," as in "diesel fuel." The design goes back to a Morrison-Knudsen design which was offered in two variants: MK1500G, burning natural gas, and MK1500D, with a variant of the same Caterpillar engine set up to burn diesel oil. Subsequently re-branded as MP1500D when the Boise plant was spun off from the M-K conglomerate, then as GP1500D when they agreed to have it marketed as an EMD locomotive.
Greater mystery: why did EMD reach back into its history for the "BL" prefix on the BL20? I suppose they wanted to have a "20" in the model number somewhere to denote the horsepower (not that THAT thought seems to have occurred to them when they introduced the GP38), and the designation "GP20" had already been used.