Is it ambiguous to use it to refer to the dog in the following sentence?
I was seen driving the car, hitting the dog, and burying it.
I was seen driving the car, hitting the dog and burying it.
I would say that the problem here is that the two commas initially give the impression that they are a pair, thus making 'hitting the dog' parenthetical. Commas aren't strong enough (in my opinion) to indicate a list in this situation.
I suggest using semicolons.
I was seen driving the car; hitting the dog; and burying it.
The semi-colon represents a break within a sentence that is stronger than a comma, but less final than a full stop. It enables the writer to avoid over use of the comma and preserves the finality of the full stop. Semi-colons are used to separate items in a list and to link closely related sentences.
Update: 17 Sep 2015
I forgot to answer the main question. My answer is no, it is not ambiguous. The word 'it' refers to the nearest noun, i.e. the dog.